For North American resin prices, 2023 ended with price drops for three commodity resins in December.
Prices for PVC, polystyrene and PET ticked down for the month, while prices for polyethylene and polypropylene were flat, according to market sources contacted by Plastics News.
Flat pricing for PE and PP in December surprised some market watchers who were expecting price drops for the month as suppliers purged their inventories to end the year. PE prices ended the year flat for three straight months after moving up 3 cents in both August and September. Counting those increases, regional PE prices were up a net of 9 cents so far in 2023.
Since domestic PE demand growth wasn't very high, export sales carried the PE market in 2023. As recently as the mid-2000s, exports made up only about 20 percent of North American PE sales. Since that point, increased access to shale gas and oil feedstocks have allowed producers to add large amounts of capacity with an eye on the export market. Exports now account for more than 40 percent of North American PE sales.
"Supplier production rates and support of record exports is essential to keep balanced inventories and impact current resin price negotiations for the 2024 supply contracts," market analyst Mike Burns said in a recent market update. "It's not likely production rates will decline this year or into Q1 2024."
PP prices were flat in December, ending a streak of three consecutive monthly increases. Polymer-grade propylene (PGP) feedstock prices were flat for the month as well. Prices for PP in the region were up an average of 5 cents per pound for November. Combined with previous increases and decreases, North American PP prices were up a net of 17 cents per pound in 2023.
Supplies of PGP tightened in September and have stayed that way because of production outages at some propane dehydrogenation (PDH) units. Those include challenges at units operated in Texas by Shell Chemical and BASF/TotalEnergies. PGP supplies will be further affected by a Dec. 4 fire at a PDH unit operated by Enterprise Products in Mont Belvieu, Texas. That unit could be down for a month, according to market reports.
Recent upswings in PP pricing are at odds with demand for the material, which has been in decline. Market sources cited American Chemistry Council data that showed North American PP demand was down about 4 percent on a monthly basis in both September and October.