Weak domestic demand, crumbling exports, and plunging feedstock prices brewed a “perfect storm” driving down commodity resin prices in the fourth quarter.

Weak domestic demand, crumbling exports, and plunging feedstock prices brewed a “perfect storm” driving down commodity resin prices in the fourth quarter.

 

PE PRICES DROP

Polyethylene prices dropped 11¢/lb in October and 15¢ more in November—on top of the 7¢ decline in September. PE prices had risen a total of 42¢/lb this year through August. By mid-November, they had fallen back 33¢, but some industry sources predicted further declines before the year’s end. Meanwhile, the London Metal Exchange (LME) North American short-term futures contract for blown film LLDPE in December plunged to 58.7¢/lb from 76¢ in October.

Contributing factors: A big drop in feedstock prices coupled with poor market demand is expected to put further downward pressure on PE resin tabs. “I would not be surprised to see at least another 10¢/lb fall-off in December,” said Mike Burns, global business director for PE at resin purchasing consultant Resin Technology, Inc. (RTI), Fort Worth, Texas. While PE suppliers are generally doing well in terms of profit margins—particularly with the drop in feedstock and energy costs—processors are not, noted Burns. “Processors are buying as needed, and many have finished-product inventory sitting on the shelf since August. It is not a good time for them to buy until prices hit bottom.” For example, if a processor aiming to buy a railcar of PE on Oct. 31 waited one more day to Nov. 1, when prices dropped 15¢/lb, the buyer would have saved $27,000.

October ethylene contract prices dropped 12¢ to 50-52¢/lb, and industry sources predicted a double-digit drop in November. Said RTI’s Burns, “Contract price could fall below 40¢/lb.”

Flint Hills Resources, which last year acquired the polyolefins business of Huntsman Corp., plans to close its Odessa, Texas, facility by mid-2009. This removes the company from the PE business, where it has capacity for 800 million/lb/yr of LLDPE and LDPE.

 

PP PRICES back to 2007

After dropping 22¢/lb in August and September, PP prices fell another 5¢ in October and a whopping 30¢ in November. The total decline of 57¢/lb left prices 32¢ below their level at the start of 2008. LME’s North American short-term futures contract for December in g-p injection-grade homopolymer dropped to 37¢/lb from November’s 59¢.

Contributing factors: Fast-dropping feedstock costs, poor domestic demand, a vanishing spot market, the loss of exports, and what now seems like oversupply all contributed to this abrupt downtrend. According to Scott Newell, RTI’s director of client services for PP, prices have followed propylene monomer price drops nearly penny for penny. Contract monomer prices for September dived 20¢, followed by a 5¢ drop in October and what was widely expected at press time to be a 30¢ plunge in November. Newell said there was a possibility that prices would bottom out in December.

Meanwhile, shutdowns of PP resin capacity were announced by both Flint Hills Resources and Ineos Olefins and Polymers USA. The former, as noted above, will close its Odessa, Texas facility, where PP production capacity is reported to be 120 million lb/yr (the company would not confirm this). Upon its acquisition of the Huntsman polyolefins business last year, the company had a total of 1.085 billion lb of PP capacity in Odessa and Longview, Texas, and Marysville, Mich. There are currently no plans to shut the other two sites.

Ineos will close its Battleground Manufacturing Complex in LaPorte, Texas, which produces 520 million lb/yr of PP homopolymer and random copolymers. One of the lines will be closed by the end of this month, and the other by the end of January.

 

PVC PLUMMETS 6-7¢

PVC prices for October settled 5¢/lb lower and are predicted to drop at least another 6¢ in November, tracking declining feedstock prices. Domestic spot PVC prices in mid November were in the 40-43¢ range, while spot Asian resin (delivered) was around 10¢ lower.

Contributing factors: Resin producers say they have never seen demand so bleak. Pipe market demand is reportedly non-existent. Pipe prices are plummeting as producers try to unload inventory, and their operating rates reportedly are only 25% to 50% of capacity. Several pipe and siding plants have closed abruptly. Resin producers’ operating rates were estimated at 72% in October and in the 60s last month.

 

PS DOUBLE-DIGIT DROP

In mid-November, PS producers were slashing prices by 10¢ to 20¢/lb. Meanwhile, the spread between GP-PS and HIPS widened to about 10¢/lb from 6-7¢ in October.

Contributing factors: PS demand continues to be very weak across the board. And contract benzene prices took an unprecedented dive in November from $4.24/gal down to $1.60, well below where they should be relative to crude oil at $65/bbl. 

 

Market Prices Effective Mid-Nov A

 
 
 RESIN GRADEb¢/LB¢/CU INc 

 ABS 

  

  
 
 MED IMPACT   95 - 115     359 - 434    
 HI IMPACT   100 - 135     378 - 510    
 X-HI IMPACT   110 - 150     415 - 567    
 HI HEAT   95 - 130     359 - 491    
 PIPE   95 - 105     359 - 396    
 SHEET   99 - 115     374 - 434    
 TRANSPARENT   134 - 205     506 - 774    
 FITTINGS   94 - 115     374 - 434    
 PLATING   134 - 205     506 - 774    
 FLAME RET   129 - 145     487 - 548    
 STRUCT FM   92 - 102     347 - 385    
 10% GLASS   134 - 145     506 - 548    
 30% GLASS   129 - 141     487    
 ABS/PC ALLOY   154 - 185     532 - 699    
 ABS/PVC ALLOY   139 - 144     525 - 544    
 ABS/NYLON ALLOY   199 - 355     752 - 1341    

 ACETAL 

  

  
 
 HOMOPOL   151 - 172     7.7 - 8.7    
 20% GLASS   171 - 235     8.7 - 11.9    
 COPOLYMER   144 - 160     7.3 - 8.1    
 25% GLASS   171 - 245     8.7 - 12.4    

 ACRYLIC 

  

  
 
 G-P   117     5.0    
 IMPACT   192     8.2    

 ACRYLONITRILE COPOL 

  

  
 
 EXTRUSION   101 - 116     4.0 - 4.6    
 INJECTION   120 - 135     4.8 - 5.4    

 ALKYD 

65 - 74   

4.9 - 5.5   
 

 CELLULOSICS 

  

  
 
 ACETATE   187     8.6    
 CAB   189     8.2    
 CAP   189     8.2    

 DAP (G-P) 

251 - 497   

16.7 - 34.7   
 

 EPOXY 

  

  
 
 G-P RESIN   116 - 126     NAd    
 COMPOUNDS          
 C/B/Te   123 - 166     9.4 - 12.9    
 R/C/Df   208 - 271     15.3 - 20.1    
 SEMICONDUCTOR          
 NOVOLAC   193 - 228     13.1 - 15.9    
 ANHYDRIDE   188 - 268     13.9 - 19.2    

 EVA 

  

  
 
 INJECTION   69 - 71     2.3 - 2.4    
 FILM EXTRU   67 - 69     2.3    

 EVOH 

330   

15   
 

 FLUORO-POLYMER 

  

  
 
 CTFE   5000 - 6000     385 - 462    
 ECTFE   1200 - 1680     90.7 - 120    
 ETFE   1205 - 1730     80.7 - 115.8    
 FEP   971 - 1470     74.8 - 113.2    
 PFA   1550 - 2520     120 - 195    
 PTFE   500 - 950     33.5 - 63.6    
 PVDF   730 - 1100     47 - 70    

 IONOMER 

  

  
 
 PACKAGING   127 - 166     4.3 - 6.0    
 INDUSTRIAL   150 - 244     5.0 - 8.3    

 LIQUID-CRYSTAL POLYMERS 

  

  
 
 INJECTION MIN FILLED   690 - 1035     44.2 - 72.1    
 GLASS FILLED   695 - 895     40 - 52    
 CARBON FILLED   1700 - 2000     83.2 - 138.6    
 UNFILLED   1000 - 1200     58 - 70    
 EXTRUSION UNFILLED   1200 - 2200     60.5 - 110.9    

 MELAMINE COMPOUND 

90 - 94   

5.5 - 5.6   
 

 MELAMINE/PHENOLIC COMPOUND 

75 - 83   

4.5 - 5.0   
 

 NYLON 

  

  
 
 TYPE 6   139 - 159     5.7 - 6.5    
 MIN FILLED   131 - 144     5.4 - 5.9    
 30% GLASS   148 - 173     6.0 - 7.0    
 TYPE 66   153 - 168     6.3 - 6.9    
 MIN FILLED   151 - 159     6.2 - 6.5    
 30% GLASS   142 - 192     5.8 - 7.9    
 TYPE 69   250 - 276     9.7 - 10.7    
 TYPE 6/10   286 - 313     12.4 - 13.6    
 TYPE 612   400     15.3    
 30% GLASS   309 - 311     14.7    
 40% GLASS   309     14.7    
 TYPE 46   295     12.6    
 TYPE 11   650 - 750     24.3 - 28    
 30% GLASS   NAd - NAd     NAd - NAd    
 40% GLASS   NAd - NAd     NAd - NAd    
 TYPE 12   318 - 341     12.1 - 13.0    
 30% GLASS   327 - 350     14.7 - 15.8    
 50% GLASS   299 - 340     15.6 - 17.8    
 TRANSPARENT AMORPHOUS   247 - 360     10.3 - 15.0    

 PHENOLIC MOLD COMP 

75   

3.8   
 
 REINFORCED GRADES   105 - 268     6.1 - 16    

 POLYAMIDE-IMIDEg 

  

  
 
 UNFILLED   2750     148.5    
 30% GLASS   2500     135    
 30% CARBON FIB.   3500     185    

 POLYARYLATE 

200 - 280   

8.8 - 12.3   
 

 POLYARYL SULFONE 

440   

21.8   
 

 POLYBUTYLENE 

  

  
 
 G-P   94 - 96     3.1    
 FILM   88 - 91     2.9    
 PIPE          
 COLD WATER   116 - 120     3.9 - 4.0    
 HOT WATER   162 - 166     5.5 - 5.6    

 POLYCARBONATE 

  

  
 
 INJECTION   171 - 182     7.4 - 7.9    
 20% GLASS   177 - 190     7.6 - 8.2    
 30% GLASS   178 - 217     7.6 - 9.3    
 EXTRUSION   145 - 180     6.3 - 7.8    
 BLOW MOLD   150 - 185     7.0 - 7.5    
 STRUCT FOAM   149 - 181     6.4 - 7.8    
 20% GLASS   235 - 255     10.1 - 11.0    
 FR   166 - 197     7.1 - 8.5    
 CD   135 - 195     5.8 - 8.4    

 POLYESTER (TP) PBT TYPE 

  

  
 
 UNFILLED   145 - 150     6.8 - 7.3    
 HI-IMP   165 - 175     7.8 - 8.3    
 30% GLASS, FR   195 - 215     9.2 - 10.1    
 STRUCT FOAM   159 - 165     NAd    

 PET 

  

  
 
 BOTTLE (RAILCAR)   82 - 86     4.0 - 4.1    
 MOD PET          
 30% GLASS   132 - 143     7.4    
 55% GLASS   148 - 155     9.8    
 30% GLASS FLAME RET   147 - 157     9.2    
 PETG COPOL   114 - 124     5.2 - 5.6    

 POLYESTER THERMOSET 

  

  
 
 G-P ORTHO   161 - 171     NAd    
 ISOPHTHALIC   190 - 205     NAd    
 BIS-A   225 - 245     NAd    

 PEEK 

4400   

231   
 
 30% GLASS   3300     173    

 POLYETHERIMIDE 

641 - 646   

29.3 - 29.5   
 
 30% GLASS   526 - 531     24.0 - 24.2    

 POLYETHERKETONE (PEK) 

2950   

130.1   
 
 30% GLASS   2600     153    

 POLYETHERSULFONE 

350 - 400   

17.2 - 19.7   
 
 30% GLASS   425 - 525     21 - 25.9    

 POLYETHYLENE (RAILCAR) LDPE 

  

  
 
 G-P MOLDING & EXTRU   53 - 55 Prices Went Down 
  1.8 Prices Went Down 
 
 INJECTION   55 - 57 Prices Went Down 
  1.8 - 1.9 Prices Went Down 
 
 LID RESIN   57 - 59 Prices Went Down 
  1.9 Prices Went Down 
 
 LINER   55 - 57 Prices Went Down 
  1.8 Prices Went Down 
 
 CLARITY   51 - 53 Prices Went Down 
  1.7 - 1.8 Prices Went Down 
 
 EXTRU COATG   56 - 58 Prices Went Down 
  1.8 - 1.9 Prices Went Down 
 
 BLOW MOLD   58 - 60 Prices Went Down 
  1.9 Prices Went Down 
 

 LLDPE, BUTENE BASED 

  

  
 
 G-P MOLDING   50 - 52 Prices Went Down 
  1.7 Prices Went Down 
 
 LME 30-DAYj   58.7 Prices Went Down 
  1.9 Prices Went Down 
 
 FILM   55 - 57 Prices Went Down 
  1.8 - 1.9 Prices Went Down 
 
 ROTOMOLD   52 - 54 Prices Went Down 
  1.7 - 1.8 Prices Went Down 
 

 LLDPE, HAO-BASED 

  

  
 
 G-P MOLDING   53 - 55 Prices Went Down 
  1.8 Prices Went Down 
 
 LID RESIN   63 - 65 Prices Went Down 
  2.0 - 2.1 Prices Went Down 
 
 LINER FILM   56 - 58 Prices Went Down 
  1.8 - 1.9 Prices Went Down 
 

 HDPE 

  

  
 
 G-P INJ MOLD   53 - 55 Prices Went Down 
  1.8 - 1.9 Prices Went Down 
 
 FILM   60 - 62 Prices Went Down 
  2.1 Prices Went Down 
 
 BLOW MOLD   61 - 63 Prices Went Down 
  2.1 - 2.2 Prices Went Down 
 

 HMW-HDPE 

  

  
 
 BLOW MOLDING   57 - 59 Prices Went Down 
  1.9 - 2.0 Prices Went Down 
 
 FILM   58 - 60 Prices Went Down 
  2.0 Prices Went Down 
 
 PIPE   65 - 67 Prices Went Down 
  2.2 - 2.3 Prices Went Down 
 

 UHMW-PE 

122 - 152   

4.1 - 5.1   
 

 PPE/PPO BASED RESIN 

  

  
 
 INJECTION   180     6.8    
 20% GLASSh   283     12.3    
 30% GLASSh   291     13.3    
 EXTRUSIONh   242     9.2    
 STRUCT FM   231     NAd    

 PPS 

  

  
 
 40% GLASS   450 - 520     27.0 - 31.2    
 55% GLASS/MINERAL   345 - 420     22.7 - 27.7    
 65% GLASS/MINERAL   270 - 315     18.9 - 22.1    

 POLYPROPYLENE (RAILCAR) 

  

  
 
 G-P HOMOPOL INJECTION   48 - 50 Prices Went Down 
  1.6 Prices Went Down 
 
 LME 30-DAYj   37.0 Prices Went Down 
  1.2 Prices Went Down 
 
 EXTRUSION FIBER   46 - 48 Prices Went Down 
  1.5 - 1.6 Prices Went Down 
 
 PROFILES   54 - 56 Prices Went Down 
  1.7 - 1.8 Prices Went Down 
 
 RANDOM COPOL          
 BLOW MOLDING   52 - 54 Prices Went Down 
  1.7 Prices Went Down 
 
 FILM   52 - 54 Prices Went Down 
  1.7 Prices Went Down 
 
 INJECTION   51 - 53 Prices Went Down 
  1.6 - 1.7 Prices Went Down 
 
 IMPACT COPOL          
 MED IMP   62 - 64 Prices Went Down 
  2.0 - 2.1 Prices Went Down 
 
 HI IMP   64 - 66 Prices Went Down 
  2.1 Prices Went Down 
 

 POLYSTYRENE (RAILCAR) 

  

  
 
 G-P CRYSTAL   78 - 84 Prices Went Down 
  2.9 - 3.1 Prices Went Down 
 
 HI HEAT   81 - 86 Prices Went Down 
  3.0 - 3.2 Prices Went Down 
 
 HIPS   88 - 94 Prices Went Down 
  3.3 - 3.5 Prices Went Down 
 
 SUPER HI IMP   94 - 99 Prices Went Down 
  3.5 - 3.7 Prices Went Down 
 
 FR   101 - 106 Prices Went Down 
  3.8 - 4.0 Prices Went Down 
 
 STRUCT FM (FR)   90 - 93 Prices Went Down 
  3.4 - 3.5 Prices Went Down 
 

 EPS 

  

  
 
 UNMODIFIED   85 - 88 Prices Went Down 
  NAd    
 MODIFIED   86 - 90 Prices Went Down 
  NAd    

 POLYSULFONE 

650 - 750   

29 - 33   
 
 10% GLASS 430 20.6   799 - 875     36 - 39    
 30% GLASS 372 20.01   699 - 775     31 - 35    

 POLYURETHANE (TP) 

  

  
 
 ESTER TYPE   185 - 255     8 - 11    
 ETHER TYPE   245 - 295     10.6 - 13    

 PU ISOCYANATES 

  

  
 
 POLYMERIC MDI   125 - 145     NAd    
 80/20 TDI   135 - 145     NAd    

 PVC RESIN (RAILCAR) 

  

  
 
 G-P HOMOPOL   49 - 61 Prices Went Down 
  NAd    
 PIPE   48 Prices Went Down 
  NAd    
 FILM   54 - 56 Prices Went Down 
  NAd    
 COPOLYMER FLOORING   69 - 74     NAd    
 DISPERSION HOMOPOLY   81 - 87     NAd    
 COPOLYMER   86 - 90     NAd    
 CPVC PIPE COMPOUND   119     NAd    

 PVDC 

  

  
 
 EXTRUDABLE   162     NAd    

 SILICONES 

  

  
 
 MOLD. COMP.   581 - 640     38.1 - 39.3    
 SPECIALTY GR.   891 - 3148     NAd    
 SILICONE/EPOXY   339 - 343     22.5 - 22.8    

 STYRENEACRYLIC 

108 - 112   

3.7 - 4.0   
 

 SAN (G-P) 

80 - 88   

3.0 - 3.3   
 

 STYRENE MALEIC ANHYDRIDE 

  

  
 
 G-P   110 - 115     4.2 - 4.3    
 HI IMP   130 - 140     4.2 - 4.5    
 FR   175 - 183     6.7 - 7.0    

 TP ELASTOMERS 

  

  
 
 OLEFINIC   70 - 76     2.4    
 POLYAMIDE   300 - 350     10.9 - 12.7    
 POLYESTER   200 - 310     8.8 - 13.6    
 STYRENIC   82 - 237     2.9 - 8.3    

 UREA MOLDING COMPOUND 

  

  
 
 BLACK & BROWN          
 WHITE & IVORY          

 VINYL ESTER 

  

  
 
 COR RES   236 - 255     NAd    
 HEAT & COR RES   261 - 268     NAd    

KEY: Colored areas indicate pricing activity. An arrow () indicates direction of price change. aTruckload, unless otherwise specified. bUnfilled, natural color, unless otherwise specified. cBased on typical or average density. dNot applicable. eNovolac and anhydride grades for coils, bushings, transformers. fNovolac and anhydride grades for resisitors, capacitors, diodes. gIn quantities of 20,000 lb. h19,800-lb load. jLME 30-day futures contract for lots of 54,564 lb..