A surprising series of price hikes hit North American commodity resin prices in December.
Regional prices for polypropylene resin were hit the hardest, soaring an average of 14 cents per pound in December as the result of strong demand, tight supplies of propylene feedstock and unplanned outages at some U.S. PP resin units.
North American prices for polyethylene resins also jumped 5 cents per pound in December, with solid polystyrene prices up 6 cents and PET bottle resin prices ticking up 1 cent.
A North American PP market that already has been impacted by tight supplies could be hammered by outages caused by a Dec. 15 fire at a plant operated by Total Petrochemicals in La Porte, Texas, combined with the unexpected shutdown of a PP line operated by Formosa Plastics Corp. USA in Point Comfort, Texas, according to market watchers contacted by Plastics News. No one was injured in the Total fire, but the unit hasn't been restarted.
"The [PP] market is struggling," Scott Newell of Resin Technology Inc. said in an email. "This feels worse than any hurricane we've ever had." He added that supplies of both propylene monomer and PP resin are "extremely tight."
"Feedstock pricing is going up and margins are expanding," Newell said. "We're expecting to see demand destruction and other market-correcting forces, but in the meantime, we're seeing PP converters actually contemplating the potential of shutting lines down and having to miss orders."
The North American PP market "is in desperate need" of impact copolymer PP, according to Gerard Selvaggio, a partner at New York City-area PP distributor Blue Clover LLC Polymer Solutions.
"Buyers still need product at this stage," he said in an email. "As of now, it remains an issue that buyers don't have enough resin to fill orders."
Selvaggio added that producers of reprocessed PP are selling large volumes because of that material's price advantage vs. virgin PP. Many reprocessed PP suppliers are sold out of that material for the next couple of months, he said.
Regional PP prices now are up 33.5 cents per pound since May. Sources said another double-digit price hike could take place in January. The Plastics News resin pricing chart was updated Jan. 7.