North American prices for most commodity resins have increased since Feb. 1 as the region deals with the fallout of freezing weather that hit the Texas coast.
Beginning Feb. 15, cold weather hit Texas, including its Gulf Coast, where much U.S. resin production is located. Plants were closed in advance of the cold snap, but some operations may have been damaged as freezing temperatures caused pipes to expand.
As of Feb. 25, many commodity resin makers on the coast still were assessing their ability to restart production. Commodity resin markets — especially polyethylene, polypropylene and PVC — already were tight before the cold snap and have been further tightened by the outages.
Plastics News this week is showing price increases for PE, suspension PVC, solid polystyrene and PET bottle resin that have taken effect since Feb. 1. PP prices for February remain unsettled, but are expected to be up at least 28 cents per pound, based on settlements for polymer-grade propylene feedstock.
Regional PP prices already had been up a combined 27 cents in December and January. These major spikes already had led some processors to issue price surcharges on PP finished products.
Regional prices for all grades of PE resin are up an average of 7 cents per pound since Feb. 1, following 5-cent hikes in both December and January. Those hikes were caused by strong demand – especially in products sold to grocery stores – and unplanned outages at some production sites.
Even before the Texas cold snap, the regional PE market was being impacted by lower production at a major plant operated in Mexico by Braskem Idesa. That plant is operating at less than 20 percent of capacity after a dispute with the Mexican government over supplies of natural gas feedstock.
Major PE makers now are seeking a 7-cent price increase effective March 1. North American PE prices are up a net of 32 cents since January 2020.
Regional prices for suspension PVC moved up 3 cents per pound in February after increasing 4 cents per pound in January. Demand is up, as processors that sell products into the building and construction markets look to build inventories.
North American PVC prices now are up a net of 22.5 cents per pound since January 2020. Construction-related uses, including plastic pipe, account for around 60 percent of annual PVC sales in the U.S. and Canada.
In solid PS, prices moved up 2 cents per pound after rising 5 cents in January and a total of 8 cents in November and December. The February increase came as a bit of a surprise, since prices for benzene feedstock, which is used to make styrene monomer, were down 5 cents to $2.43 per gallon for the month.
PS prices since January 2020 now are up a net of 19 cents. Markets for the material were affected in the second half of 2020 by the temporary shutdown of almost 600 million pounds of styrene capacity operated by Westlake Chemicals Corp. in Lake Charles, La.
Regional prices for PET bottle resin moved up an average of 3 cents per pound in February after increasing the same amount in January. Beverage suppliers are building inventories of the material in advance of higher consumption during warmer summer months.
Market sources said that although production of PET bottle resin itself wasn't much affected by the cold snap, some plants that make feedstocks needed to make the resin are down.
Regional PET prices showed a net decline of 1.5 cents per pound for full-year 2020. Bottled water has been the largest beverage market in the U.S. since 2016, when it surpassed carbonated soft drinks, according to the Beverage Marketing Corp.