Pricing is Downward for PP; Upward for PE, PS, PVC

The degree of movement in either direction is not fully clear.

Take a look as how pricing was trending from polyolefins, PS, and PVC as we enter the third week of this shortened month, with insights from Houston-based PetroChemWire (PCW), and Michael Greenberg, CEO of the Plastics Exchange in Chicago.

PE: Both PCW’s senior editor David Barry and The Plastic Exchange’s Greenberg characterized spot market activity as having pulled back, owing to limited availability. LDPE and HMWPE film grades were the tightest due to recent supply issues, noted Barry. “There was a bit of a run on spot HDPE blow molding grades, with prices jumping up 2¢/lb as suppliers snugged up,” reported Greenberg. He added that high-clarity LDPE added a half-cent, while LLDPE butene lost the same. This reset the fairly typical full 5¢/lb premium between the two.

On the contract front, both sources see the February, 4¢/lb increase as “solid”. As for the 3¢/lb March increase, that remains to be seen. PE prices were reduced by 3¢/lb in the December-January time frame.

PP: According to Barry, spot prices were lower and trading activity was limited due to the widespread perception that prices will be lower in the coming weeks. Greenberg reported that spot PP prices dropped by another 1¢/lb as he saw an increase in negative sentiment, at least from the buying side of the market. He characterized overall PP supplies, particularly prime material, as continuing to be tight, with high-flow material difficult to get at.

On the contract front, PP prices were expected to follow propylene monomer contract prices in the near term, noted Barry. February monomer contracts were settled lower by 6¢/lb. Noted Greenberg, “Processors were confident that the 9¢/lb cost-push increase endured in January will unwind between February and March, and the bulk of it in February.”

PS: PCW’s Barry reported that PS suppliers continued to implement a 2¢/lb increase in February, after a rollover last month. (Originally, suppliers were out with increases of 2-7¢/lb.)

Barry characterized the spot prime market as snug, as Total has maintained its force majeure on PS from the Carville, La. Plant. It is possible that full production of its adjoined CosMar styrene monomer plant would not resume until mid-April. Although industry sources ventured PS prices could be flat in March, another price hike attempt is not out of the question as we move forward to the start of second quarter—a seasonally strong period for PS demand.

PVC: PCW’s senior editor Donna Todd characterized the market as being in a holding pattern. She noted that January saw flat prices but that suppliers were confident their 3¢/lb price hike for February would be fully implemented. In contrast, the success of implementing the 4¢/lb increase for March was “not set in stone”.

This is particularly the case with non-pipe resin buyers. “These buyers pointed out that such a large price increase move (vs. the usual 2-3¢/lb) is normally only successful after a natural disaster, such as a hurricane that takes a significant portion of U.S. PVC production capacity offline for a time, or after a plant goes down in a rather spectacular fashion. They point out that neither of those is true, so they believe that the 4¢/lb increase will split into two 2¢/lb price hikes.”

Still, Todd noted that suppliers are feeling confident about the March increase, with a couple having already warned customers to expect  announcement of an April price hike.