North American PE, PP prices down in June, PVC on the rise

Major commodity resins polyethylene and polypropylene saw prices fall in North America in June, while regional prices for PVC resin made a surprising upward move.

North American prices for all grades of high, low and linear low density PE declined by an average of 3 cents per pound in June. Prices had been flat in May after suppliers pushed through a 3 cent hike in April. That hike was half of a 6 cent increase they had been seeking.

Mike Burns, PE market analyst with Resin Technology Inc. in Fort Worth, Texas, said that global PE capacity outpaced global demand in June. He added that prices for off-grade and export PE "are at a 10-year low."

In the regional PP market, prices fell 4 cents in June, effectively erasing a 4 cent increase in May. The June decrease followed a similar pricing trend for polymer-grade propylene feedstock.

Regional PP prices had been flat in April after five straight monthly declines lowered prices by a total of 24.5 cents.

The regional PVC market saw prices climb by an average of 2 cents in June. This move surprised some market watchers, since construction activity, which drives demand for the resin, hasn't been overly strong so far in 2019.

Through May, U.S. housing starts were down more than 3 percent vs. the same period in 2018, according to the U.S. Census Bureau.

The June PVC increase essentially makes up for a 2 cent decline seen by the market in April. Regional prices had been flat in May.

"The export market is strong worldwide and the domestic market is fairly strong," one market watcher told Plastics News. "PVC inventory was pulled down [in June] and there's a snugness in the market, even though ethylene is down the supply and demand curve is driving the price up."

May was a strong month for domestic PVC sales, the source said, adding that it was the first month this year that sales were greater than they were for that same month in 2018.

For North American engineering resins, oversupply and decreased demand have led to lower prices for several materials since April 1.

North American prices for nylon 6 are down an average of 8 cents per pound in that time frame, with polycarbonate prices down 5 and ABS prices down 7.

Market watchers said that abundant supplies should keep prices for those materials flat to slightly down for the remainder of the year even if demand is steady.

Plastics News posted the nylon 6, ABS and PC changes in the pricing chart in the June 24 issue.