Plastics Technology

SEP 2018

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higher, depending on the monomer contract price, according to Scott Newell, RTi's vp of PP markets. PCW reported spot propylene monomer prices were moving up, as was the case with PP spot prices, driven by both the rising monomer tabs and overall tight supply. Both PCW and Newell noted that the gap between wide-spec and prime market prices was wider than normal. Both saw price relief in August as unlikely. Newell said a key issue with propylene monomer is that there is no supply cushion to insulate against adverse events. In addition to unplanned outages, two factors are contributing to the tightness: the ethane advantage at refineries, which translates to lower yields of propylene, and the very high volume of monomer exports. "If anything will allow for a decrease in PP prices, it is demand destruction," Newell remarked. PCW reported that pricing of PP imports in July was attractive on paper, but buying interest was limited, possibly due to long lead times. Newell, however, predicted that lower-cost PP imports were very likely to increase in August and September: "It's difficult at this juncture to project whether that's what it will take to see price relief." He charac- terized PP demand as "holding up well" but expected some demand destruction. Both Newell and Greenberg noted that suppliers have throttled back production to keep the supply and demand in balance. Both agreed it would make sense for processors to ensure they had adequate inventories as the Gulf hurricane season approached. PS PRICES DOWN Polystyrene prices dropped 3¢/lb in July and were likely to remain flat in August and possibly this month, according to Robin Chessier, RTi's v.p. of PE, PS and nylon 6 markets. PCW reported PS spot prices as flat to lower amid indications of slower- than-expected downstream demand. Both PCW and Chessier characterized PS supply as balanced and styrene monomer avail- ability as adequate. According to PCW, implied styrene production costs based on a 30/70 formula of spot ethylene and benzene were up 1¢/lb to 31.7¢. Chessier noted that benzene prices did not react as expected when oil prices rose, hovering instead in the $2.85-2.95/gal. range. As a result, she said it was unusual that a PS price increase wasn't announced for August. She thought that PS prices could remain flat through August and September, partly because this is the start of the seasonal slowdown in demand for the domestic PS market. Things could change if benzene prices go above $3/gal, or if the Trump adminis- tration opts not to remove the tariffs on chemicals and plastics. PVC PRICES FLAT PVC prices in July held even and were likely to stay that way in both August and September, according to Mark Kallman, RTi's v.p. of PVC and engineering resin markets. He noted that there was no pressure from feedstock prices. PCW reported that while June ethylene contract prices rose by 1.5¢/lb, ExxonMobil's new 3.3 billion lb/yr ethylene cracker had started up, making it the second olefins unit of that size to come on stream this year. Both RTI's Kallman and PCW report that PVC suppliers have been expanding produc- tion to take advantage of low ethylene costs. Kallman noted that domestic demand rose, reducing suppliers' inventories and resulting in a well-balanced market. He cautioned that "tariff activity" brought a certain degree of uncertainty in terms of trade flow. PCW added, "More and more overseas markets are being closed to U.S. PVC due to anti-dumping duties or tariffs. Buyers abroad are eschewing U.S. resins out of fear that duties could be imposed after they have ordered the resins but before they arrive. In response, U.S. export prices have begun to fall." PET PRICES FLAT TO HIGHER Prices for domestic bottle-grade PET in July were steady at 76-78¢/ lb delivered Midwest, according to PCW. Supply was reportedly bolstered by restarted production at the former M&G Polymers PET plant in Apple Grove, W. Va. With capacity of nearly 805 mil- lion lb/yr, the plant was shut down last October, and along with a research facility in Ohio, was acquired by Taiwan's Far Eastern Investment Holdings. PET imports from Mexico were down in July due to production issues at plants there. Prices ranged from about 71¢/lb delivered duty-paid West Coast to 78¢/lb delivered to plants in the Northeast. PCW reported that market sources saw the possibility of domestic and import PET prices increasing 2-3¢/ lb in August, driven by strong demand in the thermoforming sector. PCW noted that prices this month could continue to rise if produc- tion disruptions in Mexico remain unresolved. Another factor is the PET imports from the five countries that were hit with anti-dumping duties in May, forcing buyers to seek alternative supplies. PVC Price Trends Pipe JULY AUG Gen. Purpose JULY AUG Polypropylene Price Trends Homopolymer JULY AUG Copolymer JULY AUG PET Price Trends Bottle Grade JULY AUG Polystyrene Price Trends GPPS JULY AUG HIPS JULY AUG 3¢/lb 3¢/lb @plastechmag 79 Plastics Technology YO U R B U S I N E S S

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