North American prices for polyethylene, polypropylene and polystyrene resins all saw increases in March.
Prices for all grades of high, low and linear low density PE were up 3 cents, according to buyers and market watchers contacted by Plastics News. Some PE makers were trying to hold out for a 5-cent increase, but a major PE buyer in the Midwest U.S. told PN that wasn't likely to happen.
Market analyst Mike Burns said that the increase was the result of "good demand and exports."
"The question is what's driving demand: restocking or consumer demand?" he added. "I think it's more likely that it's processor restocking."
PE supplies in the region are being affected by Nova Chemicals' declaration of force majeure on PE resins made at its plants in Sarnia, Ontario. In a March 21 letter to customers, officials with Nova in Calgary, Alberta, said the firm has experienced "an unplanned outage" at its Corunna, Ontario, ethylene cracker.
That cracker supplies ethylene to Nova's PE facilities in the Sarnia area. Resins impacted by the force majeure include high and low density PE and Sclairtech advanced PE resins. Officials said in the letter that the estimated duration of the force majeure is unknown.
North American PE prices had been flat in February after a surprising upward swing in January moved prices up 3 cents. That hike came after prices had been flat for three consecutive months.
Although demand was down in the second half of 2022, PE makers were able to hold prices flat by reducing production and increasing the amount exported from North America. These moves were able to counteract drops in domestic demand caused by an economic slowdown. Prices for all grades of PE were down a net of 2 cents for full-year 2022.
Increased exports have absorbed new North American PE capacity in recent years. From 2019-21, almost 40 percent of the region's overall PE production was sold into export markets, with that amount reaching a record 21.1 billion pounds in 2022. By comparison, the export market share of North American PE sales averaged only 24 percent from 2015-18.
North American PP prices for March saw an 8-cent jump, matching a price increase seen for polymer-grade propylene (PGP) feedstock. Prices for the material also had been up 8 cents in March, with PP makers adding 1 cent in margin to a 7-cent increase seen in PGP.
PP prices had jumped up 11 cents in January, matching a similar move in PGP. The 27 cents in hikes seen in the first three months of 2023 comes after PP prices were down a net of 42 cents for full-year 2022.
But the PP price hikes of early 2023 could be short-lived, officials with New York-based PP supplier Blue Clover LLC said in a market update.
"Heading into April, it appears we have a perfect storm in place for PP prices to drop," they said. "This storm is made up of increasing North American and Chinese PP supply along with decreasing North American and Chinese PP demand."
Blue Clover officials added that not all types of PP and regions will get hit to the same degree. "The biggest price decreases — more than 10 cents per pound — will come from U.S.-based polymer grade propylene and prime PP resin," they said.
Regional prices for both solid and expanded PS were up 2 cents in March, following a 3-cent hike in February. The March price hike was linked to price fluctuations for benzene feedstock, which is used to make styrene monomer.
Market prices for benzene were up 19 cents in February to $3.77 per gallon, an increase of more than 5 percent. North American benzene prices now are up a total of 70 cents so far in 2023, a surge of almost 23 percent.