Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Plastics News China
  • Rubber & Plastics News
logo-pn-color
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • End Markets
    • FYI Charts
    • LSR World
    • Multimedia
    • NPE2021
    • K Show
    • Special Reports
    • Top materials of injection molders
      Recycled PET use by product category
      US PET, flexible packaging desintations
      Global fluropolymers additives market: CAGR
    • NPE exhibitors question handling of deposits for canceled trade show
      Exhibitors back NPE cancellation: ‘We couldn't take that risk'
      NPE2021 canceled as in-person event
      NPE reviews its options as pandemic prompts exhibitor to exit
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • What Keeps You Up At Night
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Polymer Points Live
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Videos
    • Galleries
    • Podcasts
    • CEO Issue
    • Best Places to Work
    • Processor of the Year
    • Rising Stars
    • Women Breaking the Mold
  • Opinion
    • The Plastics Blog
    • Kickstart
    • Heavy Metal
    • One Good Resin
    • BRICS and Plastics
    • All Things Data
    • Viewpoint
    • Perspective
    • Mailbag
    • Getting back on the road
      How long will it take for EVs to replace internal combustion engines?
      Watching, and hoping, for progress in 2021
      COVID-19 stories dominate 2020 headlines
    • Kickstart: More toys for your collection
      Kickstart: Microchips, masks and US manufacturing
      Kickstart: Bringing plastics, sustainability to the construction site
      Kickstart: Making more US beds
    • Heavy Metal: Coronavirus edition, plus the work of working from home
      Don't put off succession planning
      What's a good gift for your cobot? Batteries?
      Here's some big ideas to mull over the holidays
    • Plaskolite wins 3M supplier award
      Green feet: Braskem partners with Dansko on bio-based clogs
      Curbell donates plastic sheet for prosthetics project in Ecuador
      Covestro volunteers build ramp for Ohio veteran
    • There was no choice but canceling NPE still a big deal
      The business case for producer responsibility
      Think divided government stalls plastics legislation? Think again
      ACC, NAM eye economic priorities in Biden presidency
    • Thermoformers: Would you believe a 12 percent gain?
      Just how big is thermoforming in North America?
      Changing names for compounders embracing corporate branding
      Diversity the key to outperforming the market
    • Thermoformers: Would you believe a 12 percent gain?
      The benefits of getting social
      Rising Stars shine bright future on industry
      Getting back on the road
    • Perspective: Plastics manufacturers — a surprising contribution to sustainability
      Plastics industry business owners: Listen to your future workforce
      Perspective: ‘Fake news' of a different sort?
      Perspective: Making products in the USA is good for the planet
    • Mailbag: Additional fees for electric vehicles ‘unfortunate'
      Mailbag: Where's the plastics industry's response to critics?
      Mailbag: Manufacturers struggling to follow COVID-19 safety rules
      Modernizing recycling infrastructure will benefit businesses as well as the environment
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
    • Maintenance can ensure efficient blender operation
      Dosing: Perfect for adding color
      Blending vs dosing: What you need to know
      Going low or high: Comparing volume
    • Colors and custom compounds
      In the laboratory: Compounding solutions
      Recycling content: Resins going ‘green’
      Compounding: Glass and other fillers
    • Dryer maintenance: Don’t err with air
      Dryers: Options for a shop’s process
      Dryer installation: Going central?
      Resins: Hygroscopic or non-hygroscopic
    • Electric injection molding presses: Efficiency is key
      Hydraulic injection molding machines
      Proper maintenance can prevent downtime
      Hybrid injection molding machines
    • Purging Hot runners: Open or closed methods
      Purging extrusion machinery
      Purging extrusion blow molding machines
      Purging: Chemical, abrasive and non-abrasive
    • Controls, special applications boost production, profitability
      Robot maintenance key for smooth operation
      High-speed robots: A rapid way to increase efficiency
      Robots: Every shape and size
    • Maintenance: Key for efficiency
      Shredders: Plastic in pieces
      Safety first for size reduction
      Granulators: The right fit
    • Video: Structural foam molding
      Structural foam molding: Flexibility for processors
    • Mold inventory: How many molds does a shop have?
      Molds: Innovation
      Mold changeover: Saving time and money
      How molds work
    • Labor: Apprenticeships may provide answer
      Internships: Solving the skills gap in-house
      College training, programs
      Lean Six Sigma: Transforming business operation
  • Events
    • Plastics News Events
    • Industry Events
    • Livestreams/Webinars
    • Ask the Expert
    • Polymer Points Live
    • Reifenhäuser Technologies Livestreams
    • 2020 Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
    • Polymer Points Live - February 2021
      Polymer Points Live - January 2021
      Polymer Points Live - December 2020
      Polymer Points Live - October 2020
    • Plastics in Healthcare 2020
    • Plastics News Executive Forum
    • Plastics in Automotive
    • Plastics News Caps & Closures
    • Plastics in Healthcare
    • Women Breaking the Mold Networking Forum
  • Resin Prices
    • All Resins
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Rankings
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Data Store
  • Directory
  • More+
    • Classifieds
    • Digital Edition
    • Newsletters
    • Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Processor of the Year submissions
    • Sponsored By Mitsubishi
      Innovative new technology from Mitsubishi Engineering-Plastics Corporation helps reduce emission footprints
      Canon Virginia, Inc.
      Sponsored Content By Canon Virginia, Inc.
      Canon Virginia Inc. brings collaboration to the table
      Sponsored By CDS MACHINES
      Facing medical equipment shortages during COVID-19 outbreak?
      Sponsored Content By Canon Virginia, Inc.
      Transform your molding capabilities with the Canon Shuttle Mold System
    • KraussMaffei
      Sponsored By KraussMaffei
      KraussMaffei Retools in US with investment from Parent Ownership
    • Sponsored By ENGEL Machinery
      Tailored maintenance for injection molding machines and robots
      Sponsored By ENGEL Machinery
      Improve maintenance efficiency with e-connect.monitor
      Sponsored By ENGEL Machinery
      Maximum precision for lowest shot weights
      Sponsored By ENGEL Machinery
      Even more cost effectiveness for small precision parts
    • Sponsored By Conexiom
      Use Sales Order Automation to free up time for CSRs to focus on customers, not manual entry
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
January 28, 2021 03:59 PM

Resin prices continue to hammer processors in 2021

Frank Esposito
Plastics News Staff
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    iStockphoto

    Resin buyers hoping to ease into 2021 had a rude awakening, as a series of price hikes have taken hold in North American markets for polypropylene and other commodity materials.

    PP prices have surged an average of 13 cents per pound since Jan. 1, after jumping 14 cents in December. The eye-popping two-month total of 27 cents in increases has led some processors to issue price surcharges on PP-finished products.

    Regional prices for polyethylene are up an average of 5 cents per pound since Jan. 1, with PVC prices up 4 cents and prices for solid polystyrene up 5 cents, according to buyers and market sources contacted recently by Plastics News.

    The PP market continues to struggle with a chaotic combination of strong demand, high prices for propylene monomer feedstock and unplanned outages at some PP production sites.

    In a Jan. 28 statement, Braskem America CEO Mark Nikolich said that fourth-quarter 2020 PP domestic demand was up more than 15 percent vs. 2019. He added that domestic PP demand was at record fourth-quarter levels because of strong demand in packaging and hygiene, as well as pent-up durables demand.

    "This strong downstream demand has created significant tightness in the propylene and polypropylene markets," Nikolich said. "To meet market needs, we continue to prioritize our clients in the domestic market while leveraging our new world-scale PP line in La Porte, Texas."

    Scott Newell, a PP market analyst with Resin Technology Inc. in Fort Worth, Texas, said in a phone interview that "there's strong [PP resin] demand, but the bigger problem is polymer-grade propylene constricting supply."

    "The only thing that could really change the [PP] market is demand destruction because of these high prices, and we might see that," he added.

    With gasoline consumption down because of the pandemic, oil refineries are running at lower rates, meaning they're making less propylene monomer as a byproduct. Increased use of natural gas as a plastics feedstock also has tightened propylene supplies, since processing natural gas produces less propylene than crude oil does.

    Newell added that high PP prices already are leading buyers to look to imported material and to use more recycled or reprocessed PP if possible.

    PP demand from rigid packaging, food packaging and consumer products remains high. One major U.S. PP buyer told Plastics News that his firm isn't yet looking at potential alternate materials because he doesn't think current high prices will have "a lasting effect" on the market.

    Market veteran Phil Karig, managing director of Mathelin Bay Associates in St. Louis, agreed that PP users aren't ready to switch resins.

    "Every time PP has gone through one of its sharp price run-ups in the last few years, whether caused by monomer or polymer shortfalls or crude oil/propylene spikes, there's a lot of talk of finding alternative resins to avoid price risks in the future," he said in an email. "There has been, however, little in the way of substantial resin substitutions."

    Karig added that, in almost every recent instance, lower-priced foreign PP "quickly starts to move into the U.S. to take advantage of price arbitrage opportunities, and the domestic market normally starts getting back into balance after a few months."

    "A lot of PP processors are in markets such as yogurt and other dairy products packaging that continue to see strong demand," he said. "The fact that PP prices have been on periodic roller-coaster rides in the last few years has somewhat accustomed processors and their end customers to assume that prices will begin to ease in the not-too-distant future, and that everyone will pretty much just have to grit their teeth in the meantime."

    The cost of switching materials and relatively high prices for competing materials such as high density PE also could convince processors to stick with PP, according to market veteran Esteban Sagel, principal of Chemical & Polymer Market Consultants in Houston.

    "At current and expected prices, converters won't want to buy PP unless strictly necessary," he said. "I believe converters are going to look for relief in other ways, such as imports."

    Sagel added that imports of PP "can help bring North American prices back to earth … when they've lost touch with the rest of the world."

    On the PP production side, a plant operated by Total Petrochemicals in La Porte, Texas, remains down after a Dec. 15 fire. Market sources said lines operated by Formosa Plastics Corp. USA and LyondellBasell Industries also remain down at Texas sites.

    Regional PP prices now are up 46.5 cents per pound since May, with market sources saying that another double-digit price hike is possible for February.

     

    PE continues to climb

    Regional PE prices jumped 5 cents in January after also moving up by 5 in December. The surprising hikes were caused by strong demand — especially in products sold to grocery stores — and unplanned outages at some production sites, according to RTI PE market analyst Mike Burns.

    "The market isn't out of the woods yet," he said. "A lot of people are still looking for material. Any bump in the road can have a big effect."

    Burns added that some PE processors are being impacted by a tight labor market. A major PE plant operated by Braskem Idesa also is operating at less than 20 percent of capacity after a dispute with the Mexican government over supplies of natural gas feedstock.

    That shutdown has further tightened the market by creating opportunities for U.S. suppliers to sell into Mexico and other parts of Latin America. Sources said that Formosa and LyondellBasell also are having PE production issues at sites in Texas and elsewhere.

    Major PE makers now are seeking a 7-cent price increase effective Feb. 1. North American PE prices are up a net of 25 cents since January 2020.

    PVC, PS tick up

    After being flat in December, regional prices for suspension PVC increased by 4 cents per pound in January. Demand is up, as processors that sell products into the building and construction markets look to build inventories.

    "We have never seen orders as strong as they were in December and January," a PVC producer told Plastics News. "Many of our customers are out about eight to 16 weeks. By the time they catch up, it will be time to build for the spring."

    North American PVC prices now are up a net of 19.5 cents per pound since January 2020, with producers seeking another 3 cents effective Feb. 1. Construction-related uses, including plastic pipe, account for around 60 percent of annual PVC sales in the U.S. and Canada.

    U.S. housing starts through October were on pace to reach almost 1.4 million for the year. That rate would be up about 0.5 percent vs. 2019 and up almost 5 percent vs. 2018.

    In solid PS, prices moved up 5 cents per pound, after increasing 6 cents in December and 2 in November. The January move again was tied to higher prices for benzene feedstock, which is used to make styrene monomer. Benzene prices jumped 39 cents to $2.43 per gallon for January, an increase of 19 percent vs. the prior month.

    PS prices since January 2020 now are up a net of 17 cents. Markets for the material were affected in the second half of 2020 by the temporary shutdown of almost 600 million pounds of styrene capacity operated by Westlake Chemicals Corp. in Lake Charles, La.

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    logo-pn-color
    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber & Plastics News
    • Urethanes Technology
    • Plastics News China
    • European Rubber Journal
    • Tire Business
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • What Keeps You Up At Night
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
        • Polymer Points Live
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • FYI Charts
        • Current FYI
      • LSR World
      • Multimedia
        • Videos
        • Galleries
        • Podcasts
      • NPE2021
      • K Show
      • Special Reports
        • CEO Issue
        • Best Places to Work
        • Processor of the Year
        • Rising Stars
        • Women Breaking the Mold
    • Opinion
      • The Plastics Blog
      • Kickstart
      • Heavy Metal
      • One Good Resin
      • BRICS and Plastics
      • All Things Data
      • Viewpoint
      • Perspective
      • Mailbag
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Plastics in Automotive
        • Plastics News Caps & Closures
        • Plastics in Healthcare
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Livestreams/Webinars
      • Ask the Expert
      • Polymer Points Live
      • Reifenhäuser Technologies Livestreams
      • 2020 Caps & Closures Library
      • Plastics in Healthcare Library
      • Women Breaking the Mold Networking Forum Library
    • Resin Prices
      • All Resins
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Rankings
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Data Store
    • Directory
    • More+
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified
      • Digital Edition
      • Newsletters
      • Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Processor of the Year submissions