North American prices for polypropylene and PET bottle resin each declined an average of 4 cents per pound in March.
Price declines for both materials were tied to lower feedstock costs, market sources told Plastics News. PP prices in the region now have declined for four consecutive months. Those four decreases have lowered prices by a total of 8.5 cents.
On a March 11 webinar hosted by Plastics News, PP market analyst Scott Newell of Resin Technology Inc. said that North American PP demand has not been very strong in early 2020. He added that PP operating rates of 85 percent in 2019 were at their lowest level in the last five years. On the capacity front, PP maker Braskem is adding just more than 1 billion pounds of annual production in La Porte, Texas, in the second quarter of 2020.
The 4-cent March PET price drop comes after prices ticked down 1 cent in February. Regional PET prices now have fallen in four of the last five months, bringing prices down a total of 7 cents. Although PET demand increases in warmer months with higher beverage consumption, the domestic PET market remains oversupplied.
The COVID-19 outbreak could impact demand for both PP and PET, sources said. PP demand could increase for medical uses as more cases are treated. PP fibers, for example, are a key component in N95 face masks, which are needed to protect health care providers. Production of N95 masks is rapidly increasing worldwide to address shortages.
PP sales into food applications also could increase in both takeout orders from restaurants and from store items, as consumers load up on more groceries to avoid frequent trips that could place them at risk.
The automotive, construction and appliance markets, however, are on track to use less PP, as economic uncertainty prompts consumers to delay major purchases.
PET demand could benefit from the outbreak, as consumers load up on bottled water. But if lockdowns last into warmer months and stop crowds from gathering, PET sales into carbonated soft drinks and bottled water could be negatively affected.
In the medical market, glycol-modified PET has seen demand rise from increased use in medical face shields that are needed by health care workers dealing with COVID-19.
In the polystyrene market, Americas Styrenics of The Woodlands, Texas, made the rare move of announcing a price decrease. Company officials said on March 26 that prices for all its PS grades would see a 7-cent-per-pound decrease on April 1.
North American solid PS prices were flat for the fourth consecutive month in February, but spot prices for benzene feedstock — used to make styrene monomer — saw some major declines in late March. Benzene prices had closed at $2.64 per gallon in February, but spot prices briefly fell under $1 in late March, as global demand dried up in the wake of COVID-19.