North American prices for most commodity resins increased in June, as demand rebounded from the impact of the COVID-19 pandemic.
Higher raw material prices also played a role in the hikes, which lifted prices for polyethylene, polypropylene, suspension PVC, solid polystyrene and PET bottle resin.
Regional PE prices moved up 4 cents per pound in June after being flat in May. The 4-cent June hike essentially negates a 4-cent price drop from April. Market sources said strong packaging demand during the pandemic helped drive overall PE demand in June. Demand also rose in general with businesses reopening in some parts of the U.S.
North American PE supplies were affected by Dow Inc.'s decision to idle three PE resin plants for at least one month in response to the COVID-19 crisis. Midland, Mich.-based Dow announced those moves on April 30.
Formosa Plastics Corp. USA also is taking a major high density PE resin unit out of commission for at least two months, according to industry reports. A 1.5 billion-pound-capacity unit in Point Comfort, Texas, will shut down for maintenance from July to early September. A smaller Formosa unit with 440 million pounds of capacity making grades for blow molding also is closed for maintenance.
Prices for Brent crude oil — a global price setter — have rebounded from less than $20 per barrel to a little more than $40 in late trading June 25. West Texas Intermediate oil prices began the year above $60 per barrel but crashed into negative territory on April 20. Prices for that material had recovered to almost $39 on June 25.
North American PP prices ticked up 1 cent per pound in June. Prices had been flat in May after falling 2 cents in April. Sources said higher raw material prices played a role in the June increase.
The automotive, construction and appliance markets had been using less PP. But the COVID-19 outbreak is creating higher PP demand for medical uses, such as N95 face masks, which are needed to protect health care providers.
Regional PVC prices jumped 3 cents per pound in June, negating a 3-cent price drop from May. Prices for the material also had declined by 5 cents in April. A market source told Plastics News that both domestic and export PVC sales improved in June.
Sales of PVC during the pandemic had been impacted by slower sales into construction, which accounts for more than half of PVC sales in the U.S. and Canada.
In the PS market, prices moved up 2 cents in June after sliding a total of 10 cents in April and May. Prices for benzene feedstock, which is used to make styrene monomer, were up slightly in June after tumbling more than 20 percent in May.
Prior to April, North American PS prices had been flat for five consecutive months. Demand has been solid in foodservice and food packaging, but it has not been strong in other sectors.
Regional PET bottle resin prices moved up an average of 1.5 cents per pound in June. Market sources said that increase had more to do with higher raw material prices, as demand for the material had been flat. Prices for PET had been flat in May after decreasing by a total of 9 cents in March and April.