Plastics Technology

NOV 2018

Plastics Technology - Dedicated to improving Plastics Processing.

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December were for fairly flat pricing, according to Scott Newell, RTi's v.p. of PP markets, as well as PCW's Barry and the Plastic Exchange's Greenberg. The latter reported, "We currently expect little change in October PP contracts, perhaps a penny softer. Spot PP prices dropped a penny following lower monomer spot prices, but rapidly returned to flat pricing due to the lack of well-priced spot PP." According to Newell, the PP market is so tightly balanced that prices could move slightly down or even up. Monomer production issues, particu- larly related to the new Enterprise and Dow on-purpose propylene plants, have continued due to harsh operating condi- tions—higher temperatures and catalyst sensitivity that make them harder to operate, according to Barry. He added, "PP suppliers are constrained because of tight propylene. The outlook for pricing is not going to change much, as domestic PP prices are the highest the world. We will keep seeing more imported PP resin and PP finished goods. So far, it hasn't made much difference to PP resin prices due to both planned and unplanned outages." Both Barry and Newell projected a continued tight PP market into next year due to monomer constraints. Said Newell, "Import volumes have increased, a sign of demand destruction as processors aim to secure additional material from other sources." Greenberg reported that the continued flow of imports, which can be 100 million lb/ month or more, has helped to fill the gaps, especially as production disruptions have impacted the already tight supplies. PS PRICES UP, THEN FLAT TO DOWN Polystyrene prices moved up 2¢/lb in September, driven by rising feedstock costs, but the projected trajectory was for generally flat pricing in October and this month, according to both Robin Chesshier, RTi's v.p. of PE, PS and nylon 6 markets, and PCW's Barry. Both sources noted that while some September ethylene contract settlements of 33.75¢/lb—up 5¢ from August—were one factor, benzene contract prices went up only 10¢/gal. Benzene accounts for 70% of PS production cost, Barry pointed out. Adds Chesshier, "There ought not to have been any increase based on feedstock costs. Polystyrene suppliers were asking for 4¢/lb when their cost increased only 1¢/lb." She expected that prices this month could be pressured downward if feedstock costs remain flat or drop along with seasonally slowed PS demand. Barry added that while there is Polystyrene Price Trends GPPS SEPT OCT HIPS SEPT OCT 2¢/lb 2¢/lb Polypropylene Price Trends Homopolymer SEPT OCT Copolymer SEPT OCT some potential for a PS price hike if crude-oil prices spike upward, benzene prices have not been following oil prices lately. PVC PRICES FLAT TO HIGHER PVC prices continued flat through September, but suppliers issued a 2¢/lb increase for Oct. 1, a move attributed in part to a September ethylene contract price hike of 5¢/lb. Mark Kallman, RTi's v.p. of PVC and engineering resin markets, thought the increase could be strongly challenged by processors, due to lower export prices, and predicted that October PVC prices would be flat to 1¢ higher. Another price increase for November was emerging, according to PCW senior editor Donna Todd. Todd reported that PVC suppliers had absorbed three other ethylene contract price hikes since May—bringing the total increases to 7.75¢/lb, which would imply an increase in PVC production costs of 3.72¢/lb. "This gives suppliers the incen- tive to try for another increase of about 2¢/lb, but a price hike in November would face even stiffer headwinds than one in October," she reported. Both Kallman and Todd noted that resin buyers typically expect prices to ease going into the fourth quarter. Kallman said that while there are some PVC plant maintenance shutdowns sched- uled for the fourth quarter, improved feedstock costs, domestic seasonal slowdown, and continued softer global demand are likely to keep the market relatively balanced. Todd also noted that with the exception of PVC pipe producers, converters in most market segments would not be able to recoup fourth-quarter price hikes, and lackluster demand and plunging PVC export prices should preclude further attempts to raise prices. PET PRICES FLAT TO HIGHER Prices for domestic bottle-grade PET ended September unchanged from August at around 80¢/lb for truckloads and bulk trucks on a delivered basis to customers on the East and West Coasts, and in the mid-80¢/lb range delivered to Midwest locations, according to PCW editor Xavier Cronin. Imported PET remained plentiful, with prices largely at parity with domestic PET, though somewhat higher for inland delivery. Cronin expected that October prices would likely rise a penny or two, driven by strong demand from the bottle and packaging sector. He ventured that November prices would soften by 3-4¢/lb, based on estimates from supplier sources on the seasonal market slowdown. PVC Price Trends Pipe SEPT OCT Gen. Purpose SEPT OCT PET Price Trends Bottle Grade SEPT OCT 1¢/lb 1¢/lb 1¢/lb 1¢/lb 1-2¢/lb 56 NOVEMBER 2018 Plastics Technology YO U R B U S I N E S S Resin Pricing Analy sis

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