North American prices for polystyrene, PVC and PET bottle resin continued their declines in September.
Improving supplies, softening demand and feedstock trends were behind the price drops. Regional PS prices for both solid and expanded PS fell 10 cents, following another major price drop for benzene feedstock, which is used to make styrene monomer. PS prices had fallen 25 cents in August after a similar benzene move.
Contract benzene prices for September closed at $3.17 per gallon, a plunge of 30 percent vs. August. Even with the August and September PS drops, prices for the material are up a net of 22 cents since February.
Lower U.S. gasoline prices in recent months have caused benzene prices to decline. Benzene is added to gas to increase its octane rating, which can improve engine performance. Average U.S. gas prices peaked at just over $5 per gallon in mid-June but have since declined and were near $3.75 on Sept. 27, sending benzene prices down as well.
Regional PVC prices were down 5 cents in September, matching similar drops seen in July and August. Regional PVC prices now are down a net of 14 cents since Jan. 1.
Construction activity is a main driver of PVC consumption. U.S. housing starts in August came in at an annual rate of 1.52 million, down 10 percent vs. July and down 14 percent vs. the same month in 2021. This trend is an indicator that PVC demand is leveling off.
PET bottle resin slumped 3 cents in September after sliding a total of 21 cents in July and August. Even with these recent drops, PET prices are up a net of 24 cents so far in 2022. According to market sources, the September PET price decline was the result of a price decrease for paraxylene (PX) feedstock, combined with lower demand and higher inventories of PET.
Strong seasonal demand for bottled water and other beverages had played a role in earlier PET price increases, as well as a lack of new capacity and freight and logistics challenges. Higher gasoline demand had lifted prices for PX, which also is used as a gasoline additive.
At a broader level, the U.S. plastics industry is expected to continue to grow in 2022 as it recovers from a pandemic-related decline that started in 2020. U.S. plastics shipments are on track to grow 1.8 percent in 2022, according to Perc Pineda, chief economist with the Plastics Industry Association in Washington. In individual job categories, Texas led the way with 20.4 percent of materials and resins jobs.
