North American prices for polypropylene and PVC resins continued to drop in November, while polystyrene saw a surprising increase.
PP dropped 2 cents for the month. Prices for polymer-grade propylene (PGP) feedstock actually were up 1 cent, but buyers were able to take back 3 cents of margin, resulting in the 2-cent downward move on resin.
PP prices had dropped 15 cents in October, as PGP made a very late downward settlement and producers lost some margin. With the November move, regional PP prices now have dropped for six consecutive months and are down a net of 38 cents in 2022.
The PP market "is definitely suffering from some of the same fallout from a weaker economy," said Howard Rappaport, a market analyst with New York-based StoneX Financial.
"Contrary to [polyethylene], PP has a much broader footprint into a number of more durable applications like automotive, appliances and electronics," he added. "If new home construction and sales weaken, you certainly won't need appliances, carpeting and electronics to finish them out."
On the capacity front, new PP supplier Heartland Polymers recently began production of homopolymer resin at a plant in Strathcona County, Alberta. Heartland is expected to produce more than 1 billion pounds of PP annually.
Regional PVC prices were down 6 cents in November, marking the fifth consecutive month that prices have fallen. Each of the previous four priced drops were 5 cents. PVC prices now are down a net of 25 cents since Jan. 1.
Construction activity is a main driver of PVC consumption. U.S. housing starts in September were up more than 1 percent vs. August, but were down more than 7 percent vs. July and more than 3 percent vs. September 2021. As a result, the PVC market is being affected by both higher inventories and lower seasonal demand.
One market watcher told Plastics News that regional PVC resin sales are down more than 1 percent overall, but were down 25 percent in October compared to the same month in 2021. The source added that customer inventories and winter weather will affect the market heading into 2023.
Prices for both solid and expanded PS were up 3 cents in November, following a surprising price hike for benzene feedstock, which is used to make styrene monomer. Market prices for benzene were up 37 cents to $3.26 per gallon, a gain of almost 13 percent. PS prices are up a net of 21 cents since February.
Officials with PS maker Trinseo of Berwyn, Pa., said that in the third quarter, their PS business saw volume declines, particularly in building and construction and appliances, as customers destocked amid falling raw material prices.
Trinseo had planned to sell its styrenics unit — including PS — but in July officials said they were delaying the sale because of economic conditions. The firm also is considering closing a styrene plant in Bohlen, Germany. The plant — with annual production capacity of almost 700 million pounds — lost about $30 million between mid-2021 and mid-2022.