April 11, 2019 Updated 4/11/2019
March held different narratives for North American commodity resins, with polystyrene and PET bottle resin prices each moving up, while prices for polypropylene declined.
The biggest change was in polypropylene, where prices slid an average of 3 cents per pound. That marks the fifth consecutive monthly price drop for PP, with those declines now totaling 24.5 cents.
The March downturn came as resin prices once again followed those for polymer-grade propylene monomer feedstock.
Full-year 2018 North American PP sales were down 0.5 percent, according to the American Chemistry Council, with a plunge of more than 30 percent in export sales canceling out an increase of less than 0.5 percent in domestic sales.
But market watchers said regional PP production issues caused a large amount of the resin to be imported into North America during 2018. As a result, true North American PP consumption likely grew 3-4 percent.
Officials with global polyolefins leader LyondellBasell Industries in Houston said earlier this year that its 2018 results were boosted partly by an increase in the spread between PP resin prices and those of propylene monomer.
PS up 2 cents
Regional solid polystyrene prices increased an average of 2 cents per pound in March, after being flat in February and declining 2 cents per pound in January. Prices for benzene feedstock, which is used to make styrene monomer, influenced these market moves for PS. Benzene prices had declined in February, but not enough to bring PS resin prices down.
North American solid PS sales struggled in 2018, dropping almost 5 percent. Exports provided a bright spot, growing more than 13 percent and reducing the impact of a 5 percent drop in domestic sales.
PET up a penny
Prices for PET bottle resin ticked up an average of 1 cent per pound in March, marking the second consecutive month that prices had increased by that amount. Prices fell 1 cent in January. Market watchers said the March hike was largely feedstock-driven, with some help from higher oil prices.
PET demand typically moves up in the spring months as processors prepare for higher sales of bottled water and carbonated soft drinks when temperatures rise across most of the United States.
At the recent Plastimagen trade show in Mexico City, an official with materials maker Alpek SAB de CV, which owns PET producer DAK Americas, said that firm’s plant making PET feedstock PTA in Altamira, Mexico, has recovered from a fire that caused the site to close for several weeks in mid-2018. No one was injured in the fire, which was caused by a leak in a seal in the plant’s oxidation sector. Officials said the plant now is back to the same level of production it was at before the fire.
In March 2018, Alpek, Indorama Ventures and Far Eastern Investment Ltd. formed a joint venture to complete a massive PET resin plant in Corpus Christi, Texas. M&G Group began to build the plant before filing for bankruptcy. Alpek officials at Plastimagen said there’s no timeline for when the plant will be completed and that it is expected to operate as a separate entity.
No changes for PE, PVC
Regional prices for all grades of polyethylene and suspension PVC were flat in March. PE prices now have been flat for three consecutive months after buyers were able to fend off a 6-cent increase that had been announced by suppliers for Jan. 1. Some market watchers thought that half of the 6 cents might stick in February, but prices rolled over to March instead and stayed flat.
PE prices had slid down 3 cents in both November and December. Market watchers cited lower oil prices and lower global demand, especially from packaging. Oil prices affect global resin markets, even though most North American PE is made from natural gas.
U.S. and Canadian high and linear low density PE sales reported major growth in 2018, resulting from larger amounts of new capacity being sold into the export markets as well as domestic sales that have reported strong growth.
HDPE sales in the region were up 12 percent for the year, according to ACC, with domestic growth of more than 5 percent amplified by export sales growth of more than 42 percent. In LLDPE, 11-month sales soared more than 24 percent, with domestic sales up almost 5 percent and export sales almost doubling.
Regional PVC prices were flat in March after moving up an average of 2 cents per pound in February. That 2-cent hike was the result of higher prices in the export market, a market source told Plastics News. Higher demand from the construction market and low resin inventories also played a role.
The February hike ended a streak of nine consecutive months of flat pricing for North American PVC. Market prices had not moved since April 2018, with supply and demand being closely balanced. Regional PVC prices were up a net of 3 cents in 2018.
PVC-related operating profit for 2018 jumped more than 40 percent to $913 million for Houston-based Westlake Chemical Corp. Earlier this year, company officials said that was mainly because of higher sales prices and volumes for caustic soda, lower ethylene costs, improved operating rates and lower costs associated with planned turnarounds and unplanned outages, as compared to 2017.
U.S. and Canadian PVC sales were solid in 2018, climbing 3 percent vs. the previous year, according to ACC. Domestic PVC sales were flat, but the overall growth rate was bolstered by a jump of 10 percent in export sales.
At the macro-feedstock level, West Texas Intermediate crude oil prices began March at $56.25 per barrel but jumped to $61.50 by the end of the month, a gain of just over 9 percent.
Regional prices for natural gas moved in the other direction, declining from $2.85 per million British thermal units to $2.70 in the same comparison, for a decline of more than 5 percent.
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