Plastics Technology

JUN 2013

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resin buying strategies PP, Ps Prices Drop; others soften Polypropylene prices have dropped signifcantly and may have hit bottom, while Pe prices fattened out and face downward pressure from increased supplier inventories, lower feedstock prices, and soft demand. Polystyrene prices slumped, although suppliers are aiming to recoup some of the loss. And PVC prices are likely to ease up starting this month. These are the observations of purchasing consultants at Resin Technology, Inc. (RTi), Fort Worth, Texas (resinpros.com), and CEO Michael Greenberg of Chicago-based The Plastics Exchange (theplasticsexchange.com). PE PRICES FLAT TO DOWN Polyethylene contract prices were fat through April, as suppliers postponed a 4¢/lb price hike that seemed no more likely to take effect in May. Industry sources see PE prices as having peaked and are likely to shed some of the 9¢/lb increase during the frst quarter. "Growing inventories at suppliers, softer demand and an easing of feedstock prices are key contributors to the fat-to-downward pricing pressure," said Mike Burns, v.p. for PE at RTi. He pointed out that low supplier inventories at the beginning of the year played a big role in pushing prices up, but those inventories in early May were at what has become an average level nowadays. Burns anticipated prices remaining fat through May and into June, despite downward pricing pressure. Greenberg from The Plastics Exchange noted that spot ethylene monomer prices for April/May were down about 15¢ to around 57¢/lb. He also reported spot PE prices sliding by 0.5¢/lb in early May, and he noted that material availability was good but that most traders and processors were holding off buying in expectation of lower prices. For June and July, both Greenberg and Burns expect PE prices could drop in response to weaker ethylene prices, improved resin supply, and potential supplier actions to reduce inventories by pricing material more attractively for exports. MARkEt PRICES EffECtIVE MID-MAy 2013 (source: Plastics technology) Resin Grade PoLyEtHyLEnE (RAILCAR) lDPe, liner llDPe, Butene, Film ¢ /lb hDPe, g-P injection hDPe, BloW molDing NYMEX 'PHYSICAL' FUTURES NYMEX 'FINANCIAL' FUTURES hDPe, hmW Film PoLyPRoPyLEnE (RAILCAR) g-P homoPolymer, injection NYMEX 'FINANCIAL' FUTURES 86-88 80-84 57.4 57.4 94-96 imPact coPolymer PoLyStyREnE (RAILCAR) g-P crystal hiPs PVC RESIn (RAILCAR) g-P homoPolymer PiPe graDe 64.5-66.5 89-91 75-77 62.5-64.5 63.4 87-89 95-97 73-75 72-74 PoLyEtHyLEnE PRICE tREnDS HDPE Injection aPr HDPE Blow Molding may aPr may HDPE HMW aPr may ? ? LDPE ? LLDPE Butene aPr may aPr may ? ? PP MAY HAVE HIT BOTTOM Polypropylene prices dropped 10¢/lb in April, in step with propylene monomer tabs. Combined with PP's 6¢ drop in March, this left intact only 5¢ of the 21¢/lb of increases implemented in the frst two months of the year. Monomer nominations for May were 1¢ to 3¢ lower than the 63¢/lb April contract price, and PP prices were expected to follow. According to Scott Newell, RTi's director of client services for PP, there were earlier nominations of a 4-6¢ price drop Plastics technology june 2013 39

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