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PE PRICES RETREAT
Polyethylene prices dropped 3¢/lb in February, erasing a 3¢ increase the month before (which was only half of what suppliers had sought). Resin makers tried again, announcing price hikes of 6¢/lb for March 1. Meanwhile, The London Metal Exchange (LME) North American futures contract for April in blown film butene LLDPE remained flat at 65.7¢/lb.

Contributing factors: Since October, PE resin prices moved up 9¢/lb. But now, slumping exports are compounding the softness in domestic demand. Up to now, the weak U.S. dollar has boosted exports to the point of creating a shortage of shipping containers in Houston. “Whereas it normally took three to five days to get containers returned from ports like Hong Kong, it now takes over two weeks to return them, because these Eastern ports have an overload of product in containers,” explains Mike Burns, global business director for PE at resin purchasing consultant Resin Technology, Inc., Fort Worth, Texas.

PE makers’ inventories have grown to 45 days or more, according to some industry analysts. RTI’s Burns thinks that PE prices are unlikely to drop further if oil prices keep rising.

From October to March, monomer prices rose and then settled lower. In October, ethylene contract prices were 57. 5¢/lb, rose to 63.5¢ in January, and settled back to 59.5¢ in February. Suppliers were pushing for March contract increases of as much as 5¢/lb, but industry analysts doubted that would happen. RTI’s Burns noted that spot ethylene prices dropped from October’s 51¢/lb to 50¢ in March.

PP PRICES DOWN
Polypropylene prices dropped 2¢ to 3¢/lb in February, offsetting a 1¢ increase in January. Nonetheless, a PP price hike was announced in late February. Suppliers were seeking 3¢ more for March 1, citing the persistently high costs of feedstocks and energy. The increase is meant to be on top of previously announced hikes. Meanwhile, the April LME North America short-term futures contract for g-p injection grade homopolymer sold at 68.4¢/lb, unchanged from March.

Contributing factors: Lower PP prices followed the February drop in propylene monomer contract prices of 3¢ to 59.5¢/lb. Suppliers were seeking March monomer contract price increases of up to 5¢/lb, but industry analysts expect a 1¢ increase at most. Says Scott Newell, RTI’s director of client services for PP, “Spot propylene is already trading down to 56-57¢/lb. However, there is now a tightening of monomer supply developing, due to planned and unplanned outages and other factors.”

Domestic resin demand remains soft and exports have declined, despite the weak dollar. This is partially due to an actual drop in overseas demand and to the shipping problems noted above. U.S. PP exports in March were estimated at about 300 million lb, down from 407 million lb/month in August and September. Industry sources like RTI’s Newell expect PP prices to remain flat at least through March, with increased likelihood of spot-market discount opportunities.

PET PRICES lower—FOR NOW
PET prices dropped 2.5¢ to 3¢/lb by the end of February, but all major suppliers issued hikes of 5¢/lb for April 1.

Contributing factors: Resin prices followed price declines in feedstocks. However, feedstock prices are expected to move up this month. PET suppliers, whose profit margins are negligible at best, aim to strengthen resin prices for the period of seasonal high demand. Says RTI’s PET global business director, Mike Dewsbury, “Supply/demand will tighten for PET in April and May.”

OTHER PRICES UP
Prices of engineering resins and thermosets may be moving up again. BASF issued several price increases for March. Its fiber materials group raised nylon 6 tabs 10¢/lb for fibers, film, wire and cable, and compounding. Its engineering materials group hiked nylon 6 and 66 by 15¢/lb and PBT 10¢/lb.

Meanwhile, AOC announced a 7¢/lb increase for unsaturated polyester resins and gel coats for April 7.