North American commodity resins squeezed some action into the short month of February, with prices for PVC and PET bottle resin both going up, while polypropylene prices declined.
Regional PVC prices moved up an average of 2 cents per pound for the month, while PET ticked up 1 cent and PP slid 1.5 cents. Prices for all grades of polyethylene and solid polystyrene in the region were flat for the month.
The 2-cent PVC hike was the result of higher prices in the export market, one market source told Plastics News. Higher demand from the construction market and low resin inventories also played a role in the increase.
The February hike ended a streak of nine consecutive months of flat pricing for North American PVC. Market prices hadn'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. and Canadian PVC sales were solid in 2018, climbing 3 percent vs. the previous year, according to the American Chemistry Council. Domestic PVC sales were flat, but the overall growth rate was bolstered by a jump of 10 percent in export sales.
PET's 1-cent increase for February came after prices had declined by that same amount the previous month. Prices for the material also had dipped 4 cents per pound in December. Market watchers said the 1-cent hike was largely feedstock driven, with some help from higher oil prices.
PET demand typically moves upward in the spring months, as processors prepare for higher sales of bottled water and carbonated soft drinks when temperatures rise across most of the U.S.
The 1.5-cent PP decline marked the fourth straight monthly dip — including a 2-cent January move — with those decreases now totaling an eye-catching 21.5 cents. The February downturn came as resin prices once again followed those of polymer-grade propylene monomer feedstock.
Market analyst Scott Newell said further price decreases for both propylene and for PP resin could be on the way for March.
"The question is, 'Where is the bottom?'" he added in an email. "There's so much inventory of monomer, and polymer [resin] that prices are dropping in search of demand.
"In the process, the market will likely find price points that will curb supply as well," said Newell, who is with Resin Technology Inc. in Fort Worth, Texas. "Only then will the market begin to balance."
Full-year 2018 North American PP sales were down 0.5 percent, according to ACC, with a plunge of more than 30 percent in export sales canceling out an increase of less than 0.5 percent in domestic sales.
But market watchers said regional PP production issues caused a large amount of the resin to be imported into North America during 2018. As a result, true North American PP consumption likely grew 3-4 percent for the year.
PE prices were flat for the second consecutive month in February as buyers again were able to fend off a 6-cent increase that had been announced by suppliers for Jan. 1. Some market watchers thought that half of the 6 cents might stick in February, but prices rolled over to March instead.
Regional PE prices had slid downward by 3 cents in both November and December. Market watchers cited lower oil prices and lower global demand for PE, especially from the packaging market, as reasons for those drops. Oil prices affect global resin markets, even though most North American PE is based on natural gas.
U.S. and 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. Regional sales of LDPE grew at lower rates in 2018, rising a little more than 7 percent. Flat domestic LDPE sales were boosted by a gain of more than 26 percent in exports.
In LLDPE, 11-month sales soared more than 24 percent, with domestic sales up almost 5 percent and export sales exploding almost 96 percent.
Regional solid PS prices were flat in January after slipping an average of 2 cents per pound in January. Prices for benzene feedstock, which is used to make styrene monomer, declined in February, but not enough to bring resin prices down as well.
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.
At the macro-feedstock level, West Texas Intermediate crude oil prices began February at $55.50 per barrel and increased slightly to $56 by the end of the month, a gain of almost 1 percent. Regional prices for natural gas moved up from $2.70 per million British thermal units to $2.85 in the same comparison, for an increase of almost 6 percent.