Prices heat up for virgin resin in August, with recycled material prices joining the rise

Prices for polypropylene, polystyrene and PVC resins all have increased since Aug. 1 as the result of solid demand and some supply restrictions.

Plastics News also is showing price hikes for recycled resins, showing increases that took place in the first half of the year.

In August, North American prices for PP jumped 11 cents per pound, matching an increase seen in prices for polymer-grade propylene monomer. Regional PP makers had attempted to add 5 cents in margin improvement onto August prices, but were unable to, market sources said.

PP makers had tried to do the same thing in July, but prices only matched the 2-cent increase seen for PGP. Prices had jumped a total of 25 cents in May and June. Factoring in previous increases and decreases, PP prices are up a net of 79.5 cents since December.

North American PP demand remains strong from many end markets, and supply has improved somewhat, but pockets of tightness remain. 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.

North American resin distributors recently told Plastics News that tight resin supplies have been combined with ongoing challenges in logistics, labor, packaging, shipping, rail and trucking. The challenges of the COVID-19 pandemic were followed by hurricanes in the second half of 2020 and the Texas ice storm.

U.S. PP operating rates in June were estimated at around 96 percent, the highest for the industry in 14 years.

Regional polystyrene prices reversed course in August, increasing by 8 cents after tumbling 10 cents in July and 8 cents in June. PS prices again followed benzene feedstock, which is used to make styrene monomer. North American PS prices now are up a net of 30 cents so far in 2021.

Benzene prices in August were up 46 cents to $3.55 a gallon, a gain of almost 15 percent vs. July. Market sources said that in spite of the August increase, regional PS production now is running ahead of demand.

Regional PVC prices moved up 2 cents in August after being flat in July. Prices for the material had been up 1.5 cents in June. Regional PVC prices now have increased 24.5 cents so far in 2021 and a net of 40 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 July, according to the Census Bureau. That number is up 3 percent vs. July, and up 6.5 percent vs. July 2020, when the COVID-19 pandemic was having more of an impact on construction activity.

Plastics News is also correcting per-pound prices for recycled resins to show increases that took place in the first half of the year. Prices for many recycled materials have increased because of higher demand from consumer product applications and a lack of availability of prime resin.

These increases include:

• High density polyethylene mixed-color post-consumer pellets up 40 cents.

• Low density PE film colored post-consumer pellets; linear low density PE stretch film pellets; and PP, ABS and PVC flake each up 15 cents.

• PP industrial pellets and PS industrial flake each up 30 cents.

• PS industrial pellets up 10 cents.

• PET clear post-consumer pellets up 25 cents.