Plastics Technology

AUG 2018

Plastics Technology - Dedicated to improving Plastics Processing.

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markets. He ventured that PP prices may have peaked in June and saw prices in July and August as likely to be flat or lower. Newell noted that monomer contracts had been expected to move up 12-13¢/lb as spot prices climbed rapidly, but those prices began to drop in mid-June. Still, he cautioned that monomer will continue to be an issue, owing to factors like higher oil prices. Another key issue since the end of 2017 is that ethane has been advantaged in steam crackers, which favors less propylene production. Further tightness has resulted from planned and unplanned propylene outages, along with considerably higher propylene exports to Mexico and Colombia and some to Europe. "It's been difficult to build a supply cushion, so we remain vulnerable to volatility," said Newell. PCW reported spot PP prices as generally firm and supply as balanced to tight, driven by strong demand and June production interruptions at Total and Braskem. It also noted that domestic PP prices were suffi- ciently elevated over global price levels to invite imports of both resin and finished goods. The Plastics Exchange's Greenberg char- acterized the overall domestic PP market as still fairly tight, with branded prime resin prices at a sharp premium to good offgrade resins. He expected an easing of cost-push pressures in July and beyond, as indicated by dropping spot monomer prices. PS PRICES FLAT-TO-DOWN Polystyrene prices remained steady in June, but downward pricing pressure was underway, with processors aiming to negotiate for price concessions of 2-3¢/lb, based on lower feedstock costs and an improved supply/demand balance, according to both PCW and Robin Chesshier, RTi's v.p. of PE, PS and nylon 6 markets. Both cited falling prices of benzene and ethylene. According to PCW, implied styrene production costs based on a 30/70 formula for spot ethylene and benzene were 1.3¢/ lb lower toward June's end—at 30¢/lb. That brought the monomer's price to more than 2¢/lb below the May 18 implied cost of 32.4¢/ lb. Chesshier also cited suppliers' difficulty in exporting styrene monomer due to tariffs from China. She also cited the recent New York City ruling that upheld a ban on PS foam cups and containers, which is likely to have an impact on PS demand. At the same time, she ventured that July was the last oppor- tunity for processors to get some price concession, as the August- September time frame is typically when suppliers push for increases due to global demand—particularly from Asian appliance markets. Polypropylene Price Trends Homopolymer JUNE JULY Copolymer JUNE JULY 8¢/lb 8¢/lb PVC PRICES FLAT PVC prices remained flat through June, despite good domestic demand and high operating rates—now above 90%, according to Mark Kallman, RTi's v.p. of PVC and engineering resin markets. Both he and PCW predicted continued flat pricing for the remainder of the summer, and possibly beyond. Downward pressure from very low ethylene costs has been ignored by suppliers, so far. According to PCW, suppliers appear to be telling processors that high export demand is squeezing the market, while at the same time telling traders that high domestic demand is the culprit. Kallman noted that global PVC demand is not as strong as in previous years and that while domestic suppliers have increased their export activity due to their low ethylene cost, PVC export prices have not increased commensurate with the volume exported. He hazarded that some upward pressure on ethylene contract prices is likely due to higher oil prices and trade tensions. Still, PCW ventured that ethylene capacity additions coming on stream this year—which will boost U.S. ethylene production by 15.3% from current levels— are likely to push PVC prices lower. Another factor is possible imposition of tariffs on U.S. PVC by current importing countries (especially China). PET PRICES UP PCW reported increases of domestic bottle-grade PET prices in June by 2¢/lb to 78¢/lb for non-contract spot business, delivered Midwest. Key drivers included higher cost for feedstocks PTA, MEG, and MX, com- bined with strong demand from the U.S. packaging sector during the high-con- sumption summer season. Meanwhile, PET imports from Asia were offered at 78¢/lb, up from 72-74¢/lb in the previous month. PCW reported that imports are rising despite the anti-dumping fees imposed in May on imports from five countries—Brazil, Indonesia, South Korea, Pakistan, and Taiwan—because of a global glut of PET, and the U.S. is one of the largest PET markets in the world. Polystyrene Price Trends GPPS JUNE JULY HIPS JUNE JULY PET Price Trends Bottle Grade JUNE JULY 2¢/lb PVC Price Trends Pipe JUNE JULY Gen. Purpose JUNE JULY @plastechmag 55 Plastics Technology YO U R B U S I N E S S QUESTIONS ABOUT MATERIALS? Visit the Materials Zone and the Materials Database.

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