August had a little bit of everything on the resin pricing front, with polyethylene, PET, PVC and polystyrene prices all showing surprising increases, but polypropylene and others showing drops.
North American PE resin prices surprised the market by increasing an average of 3 cents per pound in August. Regional PE prices had been flat in July after dropping 3 cents in June. Counting the August increase, regional PE prices are up a net of 6 cents so far in 2023.
Market watchers said that higher exports of PE from North America tightened domestic supplies of the material and allowed the August hike to take hold, even though PE demand in the region hasn't been strong this year.
"Exports had an effect on the market," market analyst Mike Burns said. He added that PE demand could improve in September as a result of seasonal trends in the packaging sector.
In an email to Plastics News, market analyst Howard Rappaport said domestic PE demand "is still underperforming, but there are some signs of improvement."
Regional PE supplies are being affected by Chevron Phillips Chemical Co.'s decision to place force majeure supply limits on high density PE resin made at one of the firm's plants in Orange, Texas. CP Chem made that move in late August after an equipment failure at the site. Nova Chemical's PE resin production also is being affected by ethylene operating issues at its sites in Ontario.
In a recent market update, research firm ICIS of Houston looked at major increases of U.S. PE exports to China in the first half of 2023. In that six-month period, the U.S. became China's largest source of imported linear low density PE, helping to keep the U.S. market balanced for that material.
Regional PE makers now are seeking increases of 3-5 cents per pound for September. Market sources were split on the chances of those hikes being successful.
North American prices for PET bottle resin, PVC and polystyrene resins also saw surprising increases in August.
North American PET bottle resin prices ticked up an average of 3 cents in August after moving up 1 cent in July. Prices for the material had dropped a total of 4 cents in May-June. The August increase was a result of higher feedstock costs. Regional PET prices are up a net of 2 cents so far in 2023.
PET demand has been lower than expected in 2023, even during the warmer summer months, which increase consumption of bottled water and carbonated soft drinks, two major PET end markets. First-quarter imports of PET into the U.S. totaled about 420 million pounds, down 25 percent vs. the same quarter in 2022, according to global trading firm Czarnikow in London. Those totals also were down in the last two quarters of 2022.
A 2-cent hike for PVC was supply-related, according to sources contacted by PN. Regional PVC prices had been flat in July after declining an average of 2 cents in both May and June. Prices for PVC now are flat so far this year.
"We'll see what the fall brings," one market source said. "Resin has been tighter all year than one would expect."
U.S. housing starts for July came in at a 1.44 million annual rate, according to the Census Bureau. That number is flat with July, but down 13 percent vs. the same month in 2022. Construction activity accounts for about 60 percent of North American PVC demand.
In the PS market, prices jumped 3 cents in August after being down 6 cents in July and 3 cents in June. The August hike was connected to fluctuations in price for benzene feedstock, which is used to make styrene monomer. Benzene prices were up 18 cents to $3.08 per gallon in July. That represents an increase of more than 6 percent vs. the previous month.
North American PS and benzene prices are essentially flat so far in 2023, with PS prices down a net of 1 cent per pound and benzene prices up 1 cent.
Global PS markets have been dealing with oversupply and low demand growth for most of the year.