Plastics Technology - Dedicated to improving Plastics Processing.
Issue link: http://pty.epubxp.com/i/105397
resin buying strategies commodity resin Prices shoot up unplanned disruptions in polymer feedstock production in December, to be followed by a number of planned cracker outages slated for the frst four months of this year, helped drive up monomer and resin prices, especially of PP, but also including PE, PS, and PVC. Further price increases are expected in this quarter by purchasing consultants at Resin Technology, Inc. (RTi), Fort Worth, Tex. (resinpros.com), and by CEO Michael Greenberg of The Plastics Exchange in Chicago (theplasticsexchange.com). Here's more on their outlook. PE PRICES MOVING HIGHER Polyethylene contract prices were fat in December, as spot prices rose to approach premium prices. Suppliers rallied around a 5¢/ lb price hike for Jan. 1, and an additional 4¢/lb increase initiated by ExxonMobil was expected to pick up support. Three drivers behind these increases are higher monomer costs, low supplier inventories, and export opportunities prompted by the Chinese New Year and higher Asian PE prices, according to Mike Burns, v.p. for PE at RTi. A series of unplanned ethylene cracker outages propelled spot ethylene prices upward by nearly 10¢/lb from early December levels to around 60¢/lb, at year's end. According to Greenberg of The Plastics Exchange, these disruptions affected mainly short-term supplies, but several more cracker shutdowns are planned from now through April. Both Greenberg and Burns anticipate tighter ethylene supply and higher prices in the near term. But once these maintenance turnarounds are completed, industry sources generally project the return of a well-balanced ethylene supply situation and lower prices. Meanwhile, there was a signifcant drawdown of suppliers' inventories in November and December, which included strong POLYETHYLENE PRICE TRENdS HdPE Injection Dec Jan HdPE Blow Molding Dec Jan HdPE HMW Dec Jan ? ? ? 5¢/lb 5¢/lb 5¢/lb LdPE Dec LLdPE Butene Jan Dec ? 5¢/lb Jan ? 5¢/lb MARkET PRICES EffECTIVE MId-jANuARY 2013 (source: Plastics technology) Resin Grade POLYETHYLENE (RAILCAR) lDPe, liner llDPe, butene, filM ¢ /lb NYMEX 'FINANCIAL' FUTURES hDPe, g-P inJection hDPe, bloW MolDing NYMEX 'FINANCIAL' FUTURES hDPe, hMW filM POLYPROPYLENE (RAILCAR) g-P hoMoPolyMer, inJection NYMEX 'FINANCIAL' FUTURES 60.0 77-79 71-73 59.4 85-87 iMPact coPolyMer POLYSTYRENE (RAILCAR) g-P crystal hiPs PVC RESIN (RAILCAR) g-P hoMoPolyMer PiPe graDe 64.5-66.5 80-82 66-68 62.5-64.5 N/A 89-91 97-99 62-64 61-63 exports to Europe and Africa, while domestic processors stocked up as prices dropped and then bottomed out. Spot PE offers were few and far between when January rolled in, and prices moved up by 1¢/lb, according to Greenberg. By the second week of January, it was unclear how much of the 5¢ increase would be implemented or whether the additional 4¢ hike had full support. Burns ventures that based on higher ethylene prices, low inventories, and suppliers' renewed export opportunities to China, at least 5¢/lb of the two increases will likely be implemented by March 1. SUDDEN PP PRICE JUMP Polypropylene contract prices moved up 1-2¢/lb in December, in step with the 1¢ increase in monomer contract settlements. Then PP suppliers fred off whopping increases of 11.5¢ to 13¢/lb for Jan. 1, following yet unsettled January monomer contract price nominations. This sudden spike in resin prices was brought on by unplanned outages of crackers, which have particularly highyields of propylene in the latter half of December. Greenberg says spot PP prices gained 6¢ in December and early January. Spot monomer prices shot up more than 10¢/lb and there Plastics technology february 2013 49