Three North American commodity resins ended summer with price drops, while two others remained flat.
The price declines were seen by polyethylene, PVC and PET bottle resin. And although regional prices for polypropylene and polystyrene were flat, the days of early-year price runups, flat summer pricing and late-year price drops appear to be over.
North American PE resin prices ended a confusing summer in August. Pricing for that materials had been the cause of much debate for the three-month period. Some PE buyers saw a 3-cent price drop in June. That 3-cent drop later spread through the rest of the market, reaching most buyers by the end of July.
Even as some buyers were assessing the 3-cent June/July drop, another 3-cent drop hit the market. This second drop — and a full 6-cent drop for the summer — was in place to most buyers by late August.
Sources said that momentum for the price declines may have come from less-than-robust domestic demand. Esteban Sagel, principal of Chemical & Polymer Market Consultants in Houston, said in an email to Plastics News that there are "plenty of reasons" for the downward PE pricing trend.
"Some drivers that come to mind include global economic jitters related to the U.S.-China trade war and Brexit, as well as an excess surplus of material due to the completion of the first wave of projects in North America," he said.
Another market watcher told Plastics News that he thinks the PE resin market "is struggling to absorb all the new capacity, so it's become a buyer's market."
ExxonMobil and Sasol have started up world-scale LLDPE units this summer, he added, so those firms are working to gain share.
"This is creating competitive situations for other suppliers," he said. "Also, I think many domestic processors saw downstream orders slow down around midyear."
Recent PE price increase announcements also might have a hard time becoming reality. A PE resin buyer with a major processor in the Midwest U.S. told Plastics News that "with about 3 billion more pounds [of PE capacity] coming onstream in a few months from Sasol and Formosa, it will be very difficult to get an increase through."
"Export volumes are very high and prices are low, so there's not a lot of ammunition to push an increase through," he added.