North American markets for polyethylene, polypropylene and PET bottle resins came racing out of the gate in January, with all three posting price hikes.
For the month, prices for all grades of PE were up an average of 5 cents per pound, with PP prices also up 5 cents and PET prices up 4 cents, according to market sources contacted by Plastics News.
The 5-cent PE increase surprised many buyers, since market fundamentals including supply and demand and feedstock prices didn't indicate that a price hike would be successful.
PE suppliers "wanted to tighten up supply and get their inventories back to normal, so they exported a lot in December and January," an Ohio-based market watcher said. "Transportation and packaging costs were up as well, but prices in January pretty much decoupled from feedstocks."
Cold temperatures hit the U.S. Gulf Coast — where much PE production is based — in late January, but that didn't have much impact on PE production, according to Mike Burns, a market analyst with Plastic Resin Market Advisors.
Price postings from market indexes also played a role in the PE price hike, as did supplier resolve to start the year with pricing momentum, sources said.
In a recent market update, consulting firm C-MACC of Houston said that although additional PE price increases are on the table for February, support for those moves "appears to be waning." The firm cited "a lack of fundamental support for another uptick of this magnitude at present."
"We maintain a neutral stance on the PE market for February," C-MACC said. "Looking ahead, we favor low-cost PE producers like ExxonMobil, Dow, LyondellBasell, Sabic, and Borouge, primarily located in North America and the Middle East, over higher-cost players in Europe and Asia (excluding China), who are expected to face continued challenges in 2025."
North American PE prices had been flat for the second consecutive month in December, after declining an average of 3 cents in October. Prices increased an average of 10 cents per pound during 2024.
Looking ahead, Burns said that 2025 market fundamentals remain unchanged from last year, with the cost to make PE down by only 1 cent per pound.
"Domestic demand will continue at the 10-year pace [and] suppliers will continue to rely on the export market to manage record production rates," he added.
Exports of PE resin from the U.S. and Canada reached an all-time high of almost 47 percent of total production in 2024. That's almost 2 percent higher than the previous high reported just last year. Total regional PE production also reached an all-time high of 63.3 billion pounds in 2024. An additional 5 billion pounds of PE production added in North America in 2023-2024 will be available in 2025.
In the PP market, the 5-cent increase followed prices for polymer grade propylene (PGP) feedstock, rather than demand for the material. With some PGP and PP production down for maintenance or in advance of the Gulf Coast cold snap, C-MACC said they "foresee ongoing support for propylene in the near term, reinforcing our constructive near-term view of PP."
The firm added that Asian PP is priced below Western levels, posing a competitive challenge for North American suppliers.
"In North America, we think non-integrated producers such as Braskem and Alpek face a greater risk of margin compression compared to more integrated peers," C-MACC said.
In a market update, PP supplier Blue Clover of New York said "anecdotally, we are seeing PP customers start off the year purchasing materials."
"Perhaps [the purchasing] is a result of stockpiling ahead of anticipated price increases," the firm added. "But maybe it's the manufacturing sector experiencing a bounce up in activity."
North American PP prices had been down an average of 2.5 cents in December and down a total of 16 cents in the last four months of 2024. per pound for the month. Combined with previous increases and decreases, PP prices finished 2024 with a net price drop of 9 cents per pound.
For PET, a 4-cent price hike was enabled by higher prices for feedstocks such as paraxylene and purified terephthalic acid (PTA). North American PET demand also saw a slight increase in January, sources said.
The January PET price hike ended a streak of five consecutive monthly price declines which had totaled 11 cents. Combined with previous increases and decreases, PET prices were down a net of 10 cents in 2024.
In an email, market analyst Kevin Mekaru with RTI in Fort Worth, Texas, said PET demand itself wasn't the driver for the January price hike. He cited the uncertainty of tariffs and related changes to feedstock and PET trade flows as reasons for the increase.
"For January, a slight revision up was forecasted with this uncertainty," Mekaru said. "As the tariff environment subsides, we should see a normal PET market as bottle season gets going in the spring."
In a recent report, the Beverage Marketing Corp. consulting firm said PET and other plastics "are a popular choice" for single-serving containers intended for on-the-go consumption, as well as for multi-serving sizes formerly packaged in heavier or non-reclosable formats.
