December ends with price drops for polypropylene and PET bottle resin

For North American commodity resins, 2019 came to a close with lower prices in December for polypropylene and PET bottle resin.

Prices for polyethylene, PVC and solid polystyrene were flat for the month, while engineering resins polycarbonate and nylon 6/6 also saw lower prices in late 2019.

North American prices for PP fell an average of 2.5 cents per pound in December, resulting from lower demand and feedstock costs. Prices for the material had slid downward by a combined 5 cents in October and November.

North American PP sales were up less than 2 percent in 2019. Factoring out exports left domestic demand slightly negative for the year. On the PP capacity front, Braskem is adding a little more than 1 billion pounds of annual production in La Porte, Texas, in the second quarter of 2020.

Regional PET prices declined 1 cent per pound in December, owing partly to low seasonal demand. Prices for the material also had fallen 1 cent in November after being flat for the second straight month in October. The domestic PET market remains oversupplied, with bottled water usage attempting to make up for ongoing declines in carbonated soft drink demand.

North American PE prices were flat in December, although some buyers had led a push for a 3-cent reduction. Prices for the material had declined an average of 3 cents per pound in November after being flat in October.

Another 1.8 billion pounds of PE capacity is set to come on line this year from Formosa Plastics Corp. USA. That's on top of almost 4.5 billion pounds added from three suppliers in 2019 and a total of more than 8 billion pounds added from four suppliers in 2017-18.

Looking past 2020, additions of more than 2 billion pounds total are slated for 2021-22. That amount does not include 3.5 billion pounds of capacity from Shell Chemical's massive project outside of Pittsburgh. Company officials have listed "early 2020s" as the start date for commercial production there.

Regional PVC prices were flat in December after declining 1 cent in November. The November PVC price drop was surprising, since the U.S. housing market recorded three of its strongest months of the year in late 2019, according to the Census Bureau. Construction activity accounts for around 60 percent of North American PVC demand, with most of that amount coming from the pipe market.

Most North American PVC makers have announced price increases of 3 cents per pound, effective Jan. 1, market sources told Plastics News.

North American solid PS prices were flat in December after falling an average of 3 cents per pound in November.

January prices for the material could be higher, based on higher prices for benzene feedstock, which is used to make styrene monomer. Benzene prices for January settled at $2.53 per gallon, up almost 10 percent vs. December.

In recent interviews with Plastics News, market watchers said that supplies for most commodity resins should be more than adequate in 2020. Fluctuations in demand could be a bigger influence on potential price increases or decreases during the year.

Regional prices for nylon 6/6 were down an average of 10 cents per pound in the final two months of 2019, sources said, with PC resin prices down an average of 5 cents in that same period. Lower demand from automotive and other markets played a role in the price drop.

Nylon 6/6 had been in tight supply for more than a year, but supplies had improved in the second half of 2019, allowing more material to be available, sources added.

In feedstocks used to make commodity plastics, West Texas Intermediate crude oil prices began December at $55.20 per barrel but had jumped almost 11 percent to $61.10 by the end of the month. Regional prices for natural gas decreased more than 4 percent in the same comparison from $2.28 per million British thermal units (Btus) to $2.18.