Minor changes for resin prices in June, but changes may be on the way

Three commodity resins saw minor price increases in North America in June, with two remaining flat.

Polypropylene resin prices reversed course during the month, increasing by 2 cents per pound. Prices had dropped 2 cents in May and 10 cents in April. Those moves, as well as the June increase, matched price changes seen for polymer-grade propylene (PGP) monomer feedstock.

Prior to the April-May price drops, PP prices had increased for three consecutive months and six times in the previous seven months. Combined with previous increases and decreases, regional PP prices now are flat so far in 2024.

In a recent report, PP supplier BlueClover LLC of New York said PGP prices "continue to climb higher" in early July. Officials added that reasons for higher PGP prices include planned maintenance at a PGP unit operated by Enterprise Petrochemical in Baytown, Texas, as well as better-than-expected demand for PGP derivatives such as PP resin. The Enterprise unit has annual production capacity of almost 1.7 billion pounds.

Short-term PP supplies also could be affected by temporary shutdowns put in place by Formosa Plastics Corp. USA and other suppliers in advance of Hurricane Beryl, which made landfall July 8 near Houston. Tighter supplies could serve to keep PP prices flat or provide momentum for another price hike.

BlueClover officials also said they don't believe a 10-cent-per-pound premium for PGP compared with 2022-23 average pricing will hold.

"While demand for PP is better than expected, PP producers have been operating at sub-80 percent in an attempt to match production to demand," they added.

Regional prices for PVC and PET bottle resin each ticked up 1 cent per pound in June.

PVC prices moved up an average of 1 cent per pound as construction season heated up.

Prices for the material had been flat in May after moving up 1 cent in April. PVC prices now have increased in four of the last five months for a total increase of 7 cents in that period.

"The domestic market is strong," a PVC market source told Plastics News. "And the export market isn't too bad, even with China exporting a lot more."

U.S. housing starts for May came in at an annual rate of 1.39 million, according to the U.S. Census Bureau. That number was down 3.5 percent vs. April and more than 9 percent vs. the same month in 2023. Construction activity accounts for about 60 percent of North American PVC demand.

The 1-cent increase for PET in June followed higher prices for raw materials, including paraxylene and purified terephthalic acid. Higher seasonal demand for bottled water and carbonated soft drinks also played a role in the June increase.

PET prices had surprised some market watchers by dropping an average of 1 cent per pound in May. Combined with previous increases and decreases, prices for the material now are flat so far in 2024.

Polyethylene prices in the region were flat for the second consecutive month in June. Suppliers had won a 3-cent increase for April after flat pricing in February and March.

Sources said an increase of as much as 3 cents could hit PE prices in July, a result of increased buying caused by concerns over brief outages caused by Hurricane Beryl, which hit the Houston area earlier in the month.

Exports of PE resin from the U.S. and Canada reached an all-time high of 45 percent of total production in 2023. The export rate was slightly higher at 46 percent in the first half of 2024. By comparison, exports accounted for 23-28 percent of North American PE production in 2015-18 and 33-39 percent of that amount in 2019-22.

Polystyrene prices were flat for the third consecutive month in June, matching flat prices for benzene feedstock, which is used to make styrene monomer. PS prices had been up a total of 9 cents in February and March after dropping a total of 9 cents from November 2023 to January 2024.

In the short term, regional PS supplies could be affected by a production outage at a resin plant operated by Americas Styrenics in Joliet, Ill. The plant will be out of production for several weeks after a tornado knocked out power in the area, according to a letter to customers obtained by PN.

The plant, which makes high-impact PS, safely managed the shutdown. AmSty officials expect that restarting the plant will take a few weeks. As a result of the outage, product grades made in Joliet will be allocated based on inventory on hand. Joliet grades made at other AmSty HIPS plants will be allocated as supply chains are adjusted, officials said.

In feedstocks, regional prices for crude oil were up in June, while natural gas prices were flat. West Texas Intermediate oil prices opened the month at $77 and increased almost 6 percent to $81.50 by the end of the month. From that point, prices have dropped almost 4 percent to $78.40 in late trading July 25.

Markets for natural gas — used as a feedstock to make PE and PVC — were largely unchanged in June. Prices started the month at $2.59 per million British thermal units and ended the month essentially flat at $2.60. From that point, prices have declined rapidly, closing at $2.12 on July 24, a drop of more than 18 percent.