Higher feedstock and energy costs have sent North American prices for polyethylene, polypropylene and polystyrene resins up since March 1.
Regional PE and PS prices each are up an average of 4 cents per pound in that time frame, while PP prices are up an average of 10 cents.
The ongoing Ukraine crisis has sent global oil prices up since Russia invaded that nation Feb. 24. West Texas intermediate crude oil prices closed around $107 per barrel March 30, up about 16 percent since Feb. 24. Prices had been above $120 earlier in the month.
That's had an impact on gasoline prices, as well as on prices for natural gas feedstock. Natural gas prices were up about 22 percent between Feb. 24 and March 30.
The 4-cent PE hike in March came after prices had been flat for two consecutive months. Regional PE prices had dropped a total of 15 cents in the last three months of 2021.
PE buyers had resisted the 4-cent move before it pushed through in March. Even though feedstock prices are higher and demand is strong, supply chain challenges have prevented North American PE makers from exporting as much PE as they want to.
"There are warehouses full of [PE] resin in Houston," one market watcher told Plastics News. "Rail cars are seeing long turnaround times and there aren't a lot of shipping containers. If this keeps up, [PE] producers are going to have to cut production."
One resin distribution executive told PN that although some specialty PE grades are in tight supply, most commodity grades "are balanced." Another distribution executive agreed that commodity PE is balanced, but added that the supply chain "is backed up because [producers] can't get resin out of the country."
The export market has taken on added importance for North American PE makers, as much of the new capacity added in the last decade to make use of shale gas feedstock has been aimed at export markets. PE makers now are working on increases of 5-6 cents for April.
The 10-cent March hike on PP matched a similar increase in price for polymer-grade propylene (PGP) monomer. Prices climbed for that material in part because some propylene in the region is a by-product of gasoline refining.
PP prices were up 6 cents in February after dropping 3 cents in January and climbing a total of 40 cents in the last four months of 2021. Spot prices for PGP had been up as much as 15 cents earlier in March.
North American PP supplies will be boosted in 2022 when Inter Pipeline Ltd. and ExxonMobil Chemical add roughly 2 billion pounds of capacity at separate locations. But in the near term, North American PP supplies could be tightened by several production issues.
LyondellBasell Industries announced force majeure supply limits on 32 PP grades made in Lake Charles, La., because of a gearbox failure. Production at Braskem SA’s PP plant in La Porte, Texas, was also affected by scheduled maintenance, a spokesperson said.
Sources added that two PP units operated by Ineos Group also are down. The firm's Chocolate Bayou unit in Alvin, Texas, is down for a maintenance turnaround, while its unit in Carson, Calif., is down because of an electrical failure, sources said.
In PS, prices in March rose an average of 4 cents, following higher prices for benzene, which is used to make styrene monomer. Regional PS prices had been up 5 cents in February after being flat for five consecutive months.
Benzene prices for March closed at $3.78 per gallon, up almost 7 percent vs. February. One distribution executive told PN that lower production from PS maker Americas Styrenics and an inability to source lower-priced imported PS could send North American PS prices up by as much as 7 cents in April.