Resin prices stretch in every direction in August

August saw a range of movement in North American commodity resin prices, with prices for one material up, two down and two flat.

Polypropylene was the only commodity resin to see higher prices in August. Regional prices for that material increased by an average of 2 cents per pound, marking the third consecutive monthly price hike.

The August PP increase was influenced by prices for polymer-grade propylene monomer feedstock. Regional PP prices had climbed 5 cents in July and 2 cents in June. The July hike also was tied to higher PGP prices, as well as supply concerns over brief outages caused by Hurricane Beryl, which hit the Houston area in early July.

Hurricane Francine — a weaker storm that hit Louisiana on Sept. 11 — caused brief shutdowns at PP units operated by ExxonMobil Chemical in Baton Rouge and by Pinnacle Polymers in Garyville, but those moves aren't expected to have much of an impact on the overall market, sources said.

According to market sources, Invista is expected to lift force majeure supply limits at its PP unit in Longview, Texas, by the end of September. Ineos Olefins & Polymers USA continues to have force majeure supply limits in place at its PP unit in Alvin, Texas.

Combined with previous increases and decreases, regional PP prices now are up a net of 7 cents so far in 2024.

PVC, PET fall

PVC and PET bottle resin were the two commodity resins seeing price drops in August, with each declining an average of 2 cents per pound.

PVC prices had increased by 1 cent in both June and July. The August price drop was tied into lower construction activity in the region. The July increase had been caused in part by weather-related production outages, including a three-day outage at a major PVC resin plant operated by Shintech Inc. in Freeport, Texas.

Market sources said U.S. and Canadian PVC operating rates declined to a little more than 82 percent in July. Resin inventory in the region also increased by almost 70 million pounds in July vs. June, increasing days of supply to less than 14 to just over 17.

U.S. housing starts dropped quite a bit in July. Housing starts for the month came in at an annual rate of just under 1.4 million, according to the U.S. Census Bureau. That number dropped 4 percent vs. June, and it was down 7 percent vs. the same month in 2023.

Construction activity accounts for about 60 percent of North American PVC demand. Regional prices now are up a net of 6 cents so far in 2024.

Regional PET bottle resin prices also declined 2 cents in August after increasing 1 cent in both June and July. The price drop followed lower prices for raw materials, including paraxylene and purified terephthalic acid, according to an industry source contacted by Plastics News.

Combined with previous increases and decreases, regional PET prices now are down a net of 1 cent so far in 2024. PET demand also saw a somewhat surprising decline in August. Seasonal demand for bottled water and carbonated soft drinks often influence North American PET prices, but demand from those markets usually doesn't decline until weather cools in most of the region later in the year.

PE, PS flat

North American polyethylene prices were flat in August after climbing 5 cents in July. Supply concerns over brief outages caused by Hurricane Beryl played a role in the July price hikes.

Some buyers had hoped to get back some of the 5 cents from July in August, but PE makers were able to hold on to it, although an additional 5-cent increase that was on the table for August was unsuccessful. Prior to the July increase, regional PE prices had been flat in May and June.

Market analyst Mike Burns previously said the July increase could hold through October, as buyers remain concerned over the possibility of more weather events. More recently, Burns said that the long-term PE outlook "doesn't foresee the sustainability of any of the July increase without an event." North American PE demand is up 3-6 percent so far in 2024, sources said.

Exports of PE resin from the U.S. and Canada reached an all-time high of 45 percent of total production in 2023. The export rate was slightly higher at 46 percent in the first eight months of 2024. By comparison, exports accounted for 23-28 percent of North American PE production in 2015-18 and 33-39 percent of that amount in 2019-22.

Regional polystyrene prices were flat in August after declining 1 cent in July. Prices for that material now have been flat four times in the last five months.

Regional PS supplies have been affected by a production outage at a resin plant operated by Americas Styrenics in Joliet, Ill., after a tornado knocked out power in the area. That situation hasn't affected pricing.

Prices for benzene, a feedstock used to make styrene monomer, dropped a total of 19 cents in July and August to reach $3.80 per gallon — a decline of almost 5 percent — but those moves also haven't affected PS pricing as much as expected.

In feedstocks, regional prices for crude oil declined in August, while prices for natural gas moved up. West Texas Intermediate oil prices opened the month at $77.90 but dropped almost 6 percent to $73.55 by the end of the month. They've continued to decline from that point, falling almost 4 percent to close at $70.65 on Sept. 24.

Markets for natural gas, used as a feedstock to make PE and PVC, started August at $2.04 per million British thermal units but climbed more than 4 percent to $2.13 by the end of the month. From that point, prices have surged an additional 22.5 percent to close at $2.61 on Sept. 23.

* Source : https://www.plasticsnews.com/resin-pricing/resin-prices-stretch-every-direction-august