July brought a little of everything for North American resin markets — higher prices, lower prices and flat prices.
Higher prices were seen for polyethylene, polypropylene and PET bottle resin. A 5-cent PE increase was delayed by negotiations between suppliers and buyers and by differences reported by widely followed price indexes. Most buyers contacted by Plastics News indicated that the 5 cents had taken hold by late July or early August.
PE demand has remained very strong, with some grades of high density PE for injection molding in especially short supply, according to market sources. PE supplies also were tightened when LyondellBasell Industries lost several days of production in La Porte, Texas, after a July 27 acetic acid leak killed two workers and injured 30.
But supplies of other grades of PE were improving, and sources said a number of buyers were "burned out and frustrated" after absorbing multiple rounds of price hikes in the last 18 months.
Regional prices for all grades of PE were up 5 cents in June. Most PE prices are up 43 cents so far in 2021 and 63 cents since January 2020. HDPE prices are up 2 cents less than low and linear low density PE. The July price hike was the eighth consecutive for the PE market.
The 2-cent PP move followed a similar increase in prices for polymer-grade propylene (PGP). The increase is far less than June's 12-cent hike and the 13-cent increase in May. Factoring in previous increases and decreases, PP prices are up a net of 68.5 cents since December.
Regional PP makers had attempted to add 5 cents of margin improvement to the 2 cents in monomer movement but were unsuccessful. Market sources said producers now will try to win that 5 cents in August.
Sources added that North American PP demand remains strong from many end markets, and supply has improved somewhat. Suppliers are continuing to recover from the ice storm that hit Texas in February and knocked out almost 90 percent of North American PP production for several days.
U.S. PP operating rates in June were estimated at around 96 percent, the highest for the industry in 14 years, sources said.
In PET, prices were up an average of 2 cents per pound in July after being flat for the previous two months. Prices are now up 14 cents so far in 2021. Market sources said PET prices in July were affected by higher prices for purified terephthalic acid (PTA) and monoethylene glycol (MEG) feedstocks.
PET prices in August could be affected by the same fatal incident at LBI in July.
Lower prices were seen for polystyrene in July. Prices tumbled 10 cents after sliding 8 cents in June. PS prices again followed benzene feedstock, which is used to make styrene monomer. Even with those declines, PS prices in North America are up a net of 22 cents so far in 2021.
Benzene prices in July were down 99 cents to $3.09 a gallon, a slide of more than 24 percent vs. June. Market sources said the reopening of restaurants may be having a negative impact on demand for takeout containers, cutlery and other PS products.
Regional PVC prices were flat in July after rising 1.5 cents in June. That hike was only half of a 3-cent move that producers were trying to make. They were unsuccessful in getting the remaining 1.5 cents in July.
Prices for the material were up 3 cents in May and have increased 22.5 cents so far in 2021 and a net of 38 cents since January 2020. The construction market, which accounts for around 60 percent of U.S./Canadian PVC demand, has been particularly strong in 2021. U.S. housing starts were at an annual rate of 1.64 million for June, according to the Census Bureau. That number is up 6.5 percent vs. May but up almost 30 percent vs. June 2020, as the COVID-19 pandemic impacted construction activity.
In feedstocks, West Texas Intermediate oil began July at $73.50 per barrel and fell below $66.50 mid-month before recovering to close the month at $73.95 for an overall increase of less than 1 percent. Prices for natural gas, used as a feedstock in North American PE and PVC, began July at $3.65 per million British thermal units, and grew to $3.91 by the end of the month, an increase of almost 7 percent.
Lower prices were seen for polystyrene in July. Prices tumbled 10 cents after sliding 8 cents in June. PS prices again followed benzene feedstock, which is used to make styrene monomer.