Plastics Technology

DEC 2018

Plastics Technology - Dedicated to improving Plastics Processing.

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? sentiment accelerates worldwide, export demand and pricing could soften and generate another wave of lower-priced offers." PP PRICES FLAT TO SIGNIFICANTLY LOWER Polypropylene prices remained flat in October, in step with propylene monomer contracts, but the potential for as much as a double-digit drop emerged in early November. "It was a surprise that prices did not drop as spot monomer prices were unwinding—down about 12¢/ lb from end of September to end of October," said Scott Newell, RTi's v.p. of PP markets. Meanwhile, what appeared to be margin increases of 2-3¢/lb were issued by Braskem for Nov. 1 and by LyondellBasell for Dec. 1, with no apparent support from other suppliers. Both Newell and PCW's Barry expected that November monomer contracts would settle 8-12¢ lower, with PP prices dropping in kind. Said Barry, "I think it would be a bit of a stretch for suppliers to expect to get a margin increase." These sources also noted that monomer availability was trending upward, as both PDH (on-purpose propylene) units were running more smoothly and there was a bit of a shift at the cracker level toward propylene. Moreover, PP demand appeared to be down since September, with competi- tive PP imports growing. By the first week in November, the Plastics Exchange's Greenberg reported that spot PP trading had slowed as buyers were looking at plummeting feedstock costs and either walked away from the market or purchased lower volumes. He also cited improved availability of both homopolymer and copolymer, with spot prices dropping by as much as 3¢/lb. Added Newell, "We're seeing more than a 3¢/lb spot-market decrease. This might prove beneficial for processors in their 2019 contract renegotiations. We'll close the year with much lower pricing, which is the best defense against demand destruction." These three sources characterized the PP market as still somewhat tight to relatively well-balanced. PS PRICES TRENDING DOWN Polystyrene prices rolled over in October, following the previous month's 2¢/lb price hike. While November prices had yet to be determined, one supplier had signaled that prices would remain flat. "This was a surprise to the industry, as most people expected that 2¢/lb gained in September would be given back," said Robin Chesshier, RTi's v.p. of PE, PS and nylon 6 markets. Both she and PCW's Barry cited the falling prices of all PS feedstocks—both domestic and global—as well as slower seasonal demand. Moreover, Chesshier noted that lower-priced PS import volumes this year were up 17-18% so far. "Buyers are pushing for lower prices and they have the right to do so," she said, adding that this could open the door for a switch to imports as well as other plastics. Noted Barry, "There's definitely pressure from buyers to reduce prices in November based on feedstock costs alone. Even if suppliers keep prices flat, they will have a very difficult time keeping prices flat in December; a substantial price drop in benzene contracts is expected, as evidenced by spot benzene prices." Both sources noted that spot benzene prices had dropped nearly 50¢/gal between September and early November, while early settlement of October ethylene contract prices dropped by 2.5¢/lb. PVC PRICES FLAT-TO-DOWN PVC prices rolled over in October and were likely to be flat to lower through the remainder of the year. This is despite the 2¢/lb October price hike that's still on the table, according to both Mark Kallman, RTi's v.p. of PVC and engineering resin markets, and PCW senior editor Donna Todd. Their reasoning: Market fundamentals do not support an increase—i.e., falling feedstock prices, lower resin export prices, and seasonally slower demand. PCW's Todd reported that PVC suppliers had aimed to get their 2¢ increase in October and then keep prices flat through year's end. But an industry pundit projected failure of the October price hike and prices remaining flat or dropping by 1¢/lb in November: "Once a whiff of a possible price decrease was proposed, resin buyers leapt at it and were considering a penny price drop in November to be a fait accompli." Kallman noted that as contract negotiations were taking place, processors would aim for lower prices based on lower fourth-quarter ethylene and resin export prices, along with slowed domestic and export demand since September. "The trade war with China will continue to impact PVC finished-goods imports." PET PRICES DROP Prices of domestic bottle-grade PET began to fall in early fourth quarter, driven by a drop in seasonal demand and a bloated supply of imports, according to PCW senior editor Xavier Cronin. Prime PET for non-contract truckload/bulk-truck business dropped by 3-4¢ /lb to the high 70¢ range for both domestic and imported resin (FOB U.S. South and Midwest). Prices in November were expected to fall another 2-3¢/lb due to the typical seasonal slowdown. At the same time, a glut of PET imports is making a buyer's market. December PET prices were expected to fall on the order of 1-3¢ /lb by most estimates. PVC Price Trends Pipe OCT NOV Gen. Purpose OCT NOV 1¢/lb 1¢/lb Polystyrene Price Trends GPPS OCT NOV HIPS OCT NOV Polypropylene Price Trends Homopolymer OCT NOV Copolymer OCT NOV 8-12¢/lb 8-12¢/lb PET Price Trends Bottle Grade OCT NOV 2-3¢/lb 2-3¢/lb 48 DECEMBER 2018 Plastics Technology YO U R B U S I N E S S Resin Pricing Analy sis

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