North American commodity resin pricing was a mixed bag in April, with three materials up, one down and one flat. In addition, prices for engineering resins nylon 6, nylon 6/6 and polycarbonate all increased in April.
Polypropylene buyers were the only group to see a decrease, as prices dropped an average of 1 cent per pound, matching a similar change in price for polymer-grade propylene monomer.
PP makers were unable to push through 6 cents in margin improvement. PP prices had been up 10 cents in March and 6 cents in February, again matching PGP.
North American PP supplies now are being tightened by production issues, but lower PGP prices could lead to lower PP prices in May, even if suppliers are successful with margin improvement.
PVC prices were up an average of 3 cents per pound in April, according to market sources. Prices had ticked up an average of 1 cent per pound in March after tough negotiations between buyers and sellers. PVC prices now are up a net of 1 cent per pound since Jan. 1.
PVC availability was affected by production challenges and power outages at vinyl chloride monomer feedstock plants. Lower demand — plus potential production challenges for Formosa Plastics Corp. USA in Point Comfort, Texas — could keep PVC prices flat in May, sources said.
In polystyrene, prices surged an average of 9 cents per pound in April after climbing a combined 9 cents in February-March. The April hike again followed higher prices for benzene, which is used to make styrene monomer.
Benzene prices for April closed at $4.09, up more than 8 percent vs. March. A market source said that lower production from PS maker Americas Styrenics and an inability to source lower-priced imported PS sent prices higher in April.
PET bottle resin prices moved up an average of 2 cents in April, a result of strong seasonal demand. Prices already had been up 27 cents in the first three months of the year. The April hike was also affected by supply tightness and freight and logistics challenges.
PET demand typically increases in spring months, as beverage companies prepare for stronger demand brought on by warmer weather. Bottled water and carbonated soft drinks, the top markets for PET, both saw growth in 2021.
Future North American supplies could be improved by the completion of a major but much-delayed PET resin and feedstocks unit in Corpus Christi, Texas. Materials maker Alpek SAB de CV of Mexico City commented on the project on an April 26 earnings call, saying that a decision on the project will be made in the next month.
Alpek co-owns the site, along with Indorama Ventures of Thailand and Far Eastern New Century of Taiwan, through a joint venture named Corpus Christi Polymers. Each of the firms in the JV also owns existing North American PET production, including Alpek's DAK Americas unit. The JV acquired the Corpus Christi site for $1.1 billion in 2018.
When completed, the site is expected to be the largest single-line vertically integrated site making PET resin and PTA feedstock in the world and the largest PTA plant in the Americas. The site's annual PET production capacity will be 2.4 billion pounds, while its PTA output will be almost 2.9 billion pounds.
Polyethylene prices were flat in April, as buyers held off a 6-cent hike that producers were pushing hard. Prices for the material had been up 4 cents in March after being flat for two consecutive months and down 15 cents in the last three months of 2021.
Feedstock prices are up and demand is solid, but supply chain challenges have prevented North American PE makers from exporting as much PE as they want to. 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 6 cents for May. Some market watchers have said the May move might succeed where the April attempt had failed. But a recent blog post from Houston-based consulting firm C-MACC indicated that PE makers might still have some work to do.
"Pushing the polyethylene increase out [from April to May] while feedstock costs remain persistently high suggests that [PE makers] are getting significant customer pushback, and this may reflect ample chain inventories," the post said.
"The run-up in polymer prices in the early part of the year was in part driven by supply chain concerns and worries over supply security, but with demand possibly plateauing, polymer buyers may feel some of the leverage moving back into their court."
Polycarbonate prices moved up 10 cents in April, with supplies remaining tight amid solid demand. Prices were also up 10 cents in March and are up a total of 29 cents so far in 2022.
Sabic's PC resin plant in Burkville, Ala., which represents about 10 percent of North American capacity, is in the process of restarting after a maintenance turnaround. But hopes for improvement in PC supplies were dampened May 17 when Covestro announced force majeure sales limits for PC made at its plant in Baytown, Texas.
In an email to Plastics News, a spokesman for Pittsburgh-based Covestro said that an unexpected power and steam outage at the Baytown site in late March was followed by an equipment failure in early May while trying to restore operations after the outage.
"[Those incidents] have significantly impacted our ability to produce BPA [feedstock] and polycarbonate," the spokesman said. "Despite exhaustive efforts to resolve production issues since the outage, supply continues to be greatly impacted."
Prices for nylon 6 and 6/6 resins each were up 5 cents in April. Sources said that demand from the automotive market is improving, even as the materials continue to see some challenges from production and logistics. Prices for both materials had been up an average of 40 cents in 2021.
The ongoing Ukraine crisis has sent global oil and natural gas prices up since Russia invaded the nation in late February. West Texas Intermediate oil prices opened April at $100.30 per barrel and had climbed to $104.70 by the end of the month for an increase of almost 4.5 percent. Prices continued to climb in May and had reached $109.60 on May 18, an increase of almost 5 percent since the end of April.
Markets for natural gas — used as a feedstock to make PE and PVC — started April at $5.64 per million British thermal units but had jumped to $7.24 — a hike of more than 28 percent — by the end of the month. As with oil, natural gas prices continued to climb in May and had reached $8.37 on May 18, an increase of almost 16 percent since the end of April.