PET bottle resin prices slid down in October, landing in negative territory for the year.
The 4-cent drop in October comes after prices were flat in September. Prices had been up a total of 4 cents in August. Market sources said the October price drop resulted from lower seasonal resin demand — as beverage consumption slows with cooler temperatures — and lower feedstock costs.
PET prices now are down a net of 1 cent so far in 2023. PET demand has been lower than expected in 2023, even during the warmer summer months.
The drop came in a month that saw a little bit of everything in North American commodity resin pricing with two other materials up and two flat according to sources contacted by Plastics News.
Polypropylene prices increased for the second consecutive month, following higher prices for polymer-grade propylene (PGP) feedstock. Prices for PP in the region closed up an average of 4 cents per pound for October. The September price hike had been 4.5 cents. Combined with previous increases and decreases, North American PP prices now are up a net of 12 cents per pound in 2023.
Pricing moves for PP again matched changes in price for PGP. Supplies of PGP tightened in September and stayed that way in October because of production outages at some propane dehydrogenation (PDH) units. Those include challenges at units operated in Texas by Shell Chemical and BASF/TotalEnergies. North American PP supplies also will be affected by Braskem America's recent decision to stop production on a resin line in Marcus Hook, Pa.
In a recent market report, PP supplier Blue Clover LLC of New York said that PGP prices "continue to climb higher on PDH issues, yet demand for PP is falling rapidly." Blue Clover also said that the regional PP market "is coming off a slightly reduced supply period where certain PP reactors were down. These are the primary reasons for the higher PP price offers out there today." But they added that PP demand from the buy side "remains very weak."
And although the huge Chinese PP market is improving, it still faces challenges, according to a research note from John Richardson with consulting firm ICIS of Houston. Through the first nine months of 2023, PP demand growth in China was up 2 percent — 1 point higher than it had been in the first eight months of the year.
The Chinese PP market remains oversupplied because China's growth was overestimated, Richardson said. "As recently as three years ago, when new projects had been sanctioned … chemicals demand in general in China was expected to grow by 6-8 percent per year. Now, 1-3 percent seems more likely."