Plastics Technology

DEC 2018

Plastics Technology - Dedicated to improving Plastics Processing.

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As we approach the end of the year, prices for four of the five large-volume commodity resins are heading downward. Among the key drivers are lower-cost feed- stocks—in the case of PP, approaching double-digit levels—as well as slowed demand, year-end destocking, and some competition from lower- cost imports. Prices of PE, though also impacted by some of these factors, plus slower export activity, were expected to remain flat despite two looming price hikes. These were the views last month of purchasing consultants from Resin Technology, Inc. (RTi), Fort Worth, Texas (rtiglobal.com); senior editors from Houston-based PetroChemWire (PCW, petrochemwire.com); and CEO Michael Greenberg of the Plastics Exchange in Chicago (theplasticsexchange.com). PE PRICES FLAT Polyethylene prices remained flat in October and November, after the September 3¢/lb price hike. Suppliers delayed their October 3¢/ lb increase to November, and their November 3¢ increase to December. Mike Burns, RTi's v.p. of PE markets, ventured that prices would remain flat this month as well, but that could change early next year. "Eight out of the last 10 years, we saw PE prices move up in the first quarter due to strong exports and domestic restocking. For this coming year, it's not clear what will happen with exports. But domestic demand is likely to continue strong, so I don't expect PE prices to go down." In fact, Burns saw domestic demand as the key driver for the next round of price increases. He did not expect feedstocks and inventory levels to be the short-term price drivers; both ethane and spot ethylene prices were lower last month. In early November, the cost to produce ethylene was near 17¢/ lb, and the cost to make a PE pellet was 33¢/ lb, down 5¢/lb from the end of September. He saw strong resin demand in North America as affected by tariffs: "All low-cost commodity- Falling feedstock costs are one factor driving prices lower for PP, PS, PVC and PET, while PE remains flat. By Lilli Manolis Sherman Senior Editor grade finished goods—from a broad range of bags to shrink wrap— are no longer being imported from China. Major distributors of these products have turned to domestic film processors." Weighing in, PCW senior editor David Barry noted that there was no momentum to support domestic price increases, and he high- lighted flat exports as one key issue. He said suppliers would need to decrease export prices and that they were initiating discussions to ramp up exports before the end of the year. There were also reports of slowed domestic demand, particularly in film sectors, as a result of destocking in the aftermath of hurricane season, forecasts of lower prices before year's end, and year-end inventory management. The Plastics Exchange's Greenberg reported a very strong October for the spot PE market, with plenty of low-cost offers in LLDPE and LDPE film grades and HDPE injection grades. Going into November, he saw spot PE prices moving up 1-3¢/lb, helping to reduce the large gap (about 10¢/lb) between spot and contract pricing. Greenberg noted that export demand was also starting to sag as a result of sharply lower crude oil prices. "If oil continues to fall, and bearish Polyethylene Price Trends HDPE Injection OCT NOV HDPE Blow Molding OCT NOV HDPE HMW OCT NOV LDPE OCT NOV LLDPE Butene OCT NOV Market Prices Effective Mid-November 2018 Resin Grade ¢/lb POLYETHYLENE (railcar) LDPE, LINER . . . . . . . . . . . . . . . . . . . . . . . . . . . 101-103 LLDPE BUTENE, FILM . . . . . . . . . . . . . . . . . . . . 84-86 NYMEX 'FINANCIAL' FUTURES . . . . . . . . . . . . 43 DECEMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . 43 HDPE, G-P INJECTION . . . . . . . . . . . . . . . . . . . . 106-108 HDPE, BLOW MOLDING . . . . . . . . . . . . . . . . . . . 96-98 NYMEX 'FINANCIAL' FUTURES . . . . . . . . . . . . 48 DECEMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . 48 HDPE, HMW FILM . . . . . . . . . . . . . . . . . . . . . . . 113-115 POLYPROPYLENE (railcar) G-P HOMOPOLYMER, INJECTION . . . . . . . . . . . 92-94 NYMEX 'FINANCIAL' FUTURES . . . . . . . . . . . . 72.13 DECEMBER . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 IMPACT COPOLYMER . . . . . . . . . . . . . . . . . . . . . 94-96 POLYST YRENE (railcar) G-P CRYSTAL . . . . . . . . . . . . . . . . . . . . . . . . . . . 108-110 HIPS . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 114-116 PVC RESIN (railcar) G-P HOMOPOLYMER . . . . . . . . . . . . . . . . . . . . . 83-85 PIPE GR ADE . . . . . . . . . . . . . . . . . . . . . . . . . . . . 82-84 PET (truckload) U.S. BOT TLE GR ADE . . . . . . . . . . . . . . . . . . . . . 76-78 Commodity Resin Prices End Year on Downward Path @plastechmag 47 Plastics Technology YO U R B U S I N E S S Resin Pricing Analy sis

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