Shortages, shutdowns and unexpected demand continued to impact commodity resin prices in December, capping the year with yet more increases.
Regional prices for polypropylene resin were hit the hardest, soaring an average of 14 cents per pound in December as the result of strong demand, tight supplies of propylene feedstock and unplanned outages at some U.S. PP resin units.
North American prices for polyethylene resins also jumped 5 cents per pound in December, with solid polystyrene prices up 6 cents and PET bottle resin prices ticking up 1 cent.
A North American PP market that already has been impacted by tight supplies could be hammered by outages caused by a Dec. 15 fire at a plant operated by Total Petrochemicals in La Porte, Texas, combined with the unexpected shutdown of a PP line operated by Formosa Plastics Corp. USA in Point Comfort, Texas, according to market watchers contacted by Plastics News.
No one was injured in the Total fire, but the unit hasn't been restarted.
"The [PP] market is struggling," Scott Newell of Resin Technology Inc. said in an email."This feels worse than any hurricane we've ever had." He added that supplies of both propylene monomer and PP resin are "extremely tight."
The North American PP market "is in desperate need" of impact copolymer PP, according to Gerard Selvaggio, a partner at New York City-area PP distributor Blue Clover LLC Polymer Solutions.
"Buyers still need product at this stage," he said in an email. "As of now, it remains an issue that buyers don't have enough resin to fill orders."
Regional PP prices now are up 33.5 cents per pound since May.
The 5-cent PE hike was the result of "general snugness" in resin supplies and by producers' ability to export material, according to a market source in the Southeastern U.S. The source added that production constraints at some resin plants on the region also helped the increase take hold.
The recent shutdown of Braskem Idesa's PE production in Mexico also played a major role in the December move.
"The Braskem Idesa woes in Mexico are one of the key factors pushing prices higher," said Esteban Sagel, president of Chemical & Polymer Market Consultants in Houston.
"When that plant shut down on Dec. 1, suddenly, the North American region lost approximately 1.5 billion pounds of HDPE and 600 million pounds of LDPE supplies," he said. "This supply shock will take some time to be sorted out by the market."
North American PE prices were up a net of 20 cents per pound in 2020. That increase is the largest seen for PE resin in the region since 2009, according to Resin Technology Inc.
The 6-cent PS hike followed a 2-cent increase in November and again was tied to higher prices for benzene feedstock, which is used to make styrene monomer. Benzene prices rocketed up 49 cents to $2.04 per gallon for December, an increase of almost 32 percent vs. the prior month.
PS prices for full-year 2020 were up a net of 12 cents.
The 1-cent PET bottle resin uptick in December came after prices were flat in November. It came as a bit of a surprise, since beverage-heavy PET sales decline in colder months. Regional PET prices showed a net decline of 1.5 cents per pound for full-year 2020.
Bottled water has been the largest beverage market in the U.S. since 2016, when it surpassed carbonated soft drinks, according to the Beverage Marketing Corp. Total bottled water volume grew almost 4 percent in 2019 and has shown volume growth every year since 1977, according to BMC, with the exceptions of 2009-09.
Look for more coverage in the monthly Polymer Points column in the Jan. 11, 2021, issue of Plastics News and during the Jan. 19 Polymer Points Live webcast.