The year got off to a bit of a rough start for North American polypropylene, solid polystyrene and PET bottle resin markets.
Regional PP and solid PS prices both fell an average of 2 cents per pound in January, with PET down 1 cent, according to market sources contacted by Plastics News. Prices for PP continued a slide that has seen them tumble a total of 18 cents in November and December.
Like previous price drops, the January PP slide was tied into lower prices for polymer-grade propylene feedstock. Those prices have dropped as propylene supplies have increased. North America now has the lowest PGP prices in the world, according to Scott Newell, a market analyst with Resin Technology Inc. in Fort Worth, Texas.
Recent PP demand also has been hurt by higher prices earlier in 2018, he added.
“Inventories are high for both monomer and PP [resin],” Newell explained. “We should start to see these [lower] prices attract [PP] demand back to the U.S. in coming months.”
The regional PP market in 2018 also was impacted by increased supplies of PP imported from other countries. Tight North American PP supplies and low prices for imported resin led buyers to foreign suppliers.
North American PP sales through November were down a little more than 1 percent, according to the American Chemistry Council, as a drop of 32 percent in export sales brought down flat domestic sales. Market watchers said actual PP consumption in the region more likely was up 3-4 percent for the year because of increased amounts of imported PP.
Regional solid PS prices slipped an average of 2 cents per pound in January after sliding 7 cents in December. Those moves were tied to lower demand and to lower prices for benzene feedstock, which is used to make styrene monomer.
North American solid PS sales struggled in 2018, dropping almost 5 percent through November. Exports have provided a bright spot, growing more than 13 percent and reducing the impact of a 5.5 percent drop in domestic sales.
PET bottle resin prices were down 1 cent in January after declining by 4 cents in December. Those drops followed declines of 6 cents in November and 1 cent in October. Market watchers cited lower demand and improving supplies of purified terephthalic acid and other raw materials as reasons for the declines. Demand for bottle resin declines in the fall and winter months — the result of declining sales of bottled water and carbonated soft drinks.
Other prices flat
Regional prices for all grades of polyethylene and PVC were flat for January, sources said. In December, regional prices for all grades of PE had slipped an average of 3 cents per pound. Major PE makers were seeking a 6-cent hike effective Jan. 1, but that move was pushed back. Market watchers said that some PE makers now may seek back-to-back monthly increases of 3 cents per pound.
The 3-cent December drop for all grades of PE followed a similar 3-cent decline in November. Market watchers cited lower oil prices and lower global demand for PE, especially from the packaging market, as reasons for the November and December drops. Oil prices affect global resin markets, even though most North American PE is based on natural gas.
U.S./Canadian high and linear low density PE sales reported major growth in 2018, resulting from larger amounts of new capacity being sold into the export markets as well as domestic sales that have grown at strong rates.
HDPE sales in the region were up 12 percent for the year, according to ACC, with domestic growth of more than 5 percent amplified by export sales growth of more than 42 percent. Domestic HDPE growth for 2018 was led by the pipe and conduit market, where sales surged 14 percent.
In LLDPE, 11-month sales soared more than 24 percent, with domestic sales up almost 5 percent and export sales exploding almost 96 percent. Trash and can liners led domestic LLDPE growth through November, increasing 8 percent.
Regional sales of LDPE grew at lower rates in 2018, rising just over 7 percent. Flat domestic LDPE sales were boosted by a gain of more than 26 percent in exports. Domestic LDPE growth in 2018 was led by food packaging film, which grew more than 4 percent.
January marked the ninth consecutive month of flat pricing for North American PVC. Market prices haven't moved since April, with supply and demand being closely balanced. Regional PVC prices were up a net of 3 cents in 2018.
U.S./Canadian PVC sales were solid in 2018, climbing 3 percent vs. the previous year. Domestic PVC sales were flat, but the overall growth rate was bolstered by a jump of 10 percent in export sales. Among PVC end markets, extruded windows and doors showed strong growth of almost 27 percent. That segment accounted for almost 7 percent of all domestic PVC sales for the year.
At the macro-feedstock level, West Texas Intermediate crude oil prices began January at $47 per barrel but had increased to $55 by the end of the month, a gain of 17 percent. Regional prices for natural gas fell from $2.80 per million British thermal units to $2.70 in the same comparison, for a drop of almost 4 percent.
