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PP PRICES UP A BIT; MORE SOUGHT Polypropylene prices in July moved up by 0.5¢/lb in step with the July propylene monomer contact. However, most major suppliers had issued a 3¢/lb hike for profit-margin expansion on Aug. 1, above what the monomer contract price might settle at in August. An important exception was ExxonMobil, which had made no move by July's end, noted Scott Newell, RTi's v.p. of PP markets. Newell sees the return of profit- margin expansion moves as "on shaky legs." He explained, "June was one of the strongest demand months—perhaps a record one—for PP. It was mostly attrib- uted to restocking after the price volatility of the first quarter. Suppliers' invento- ries saw a drawdown of 125 million lb, resulting in a tight market." But he noted that demand is now slowing, as indicated by material returning to the spot market. Newell thought August monomer contracts were likely to end up flat-to-down. So, if propylene loses the 0.5¢ gained in July, PP suppliers would aim to implement a 2.5¢/lb margin expansion. His assessment was based on the fact that by the end of July, two downed propylene units, which had caused monomer tightness, had been restarted. Greenberg's take on what was setting up to be the first margin-enhancing PP price increase in more than a year is that monomer supply would be the wildcard. "If all units can remain up and running, monomer might go another leg lower and resin prices might just fall less. Otherwise, we see a good chance that a stable or firming monomer market would help push PP prices higher in August and September." PCW reported that PP spot prices were flat to a penny lower, amid some signs of improving homopolymer availability. Spot impact and random copolymers were still balanced-to-tight, with suppliers enjoying two months of strong domestic sales in May-June and several suppliers recovering from recent production issues. PS PRICES DOWN Polystyrene prices in July dropped 2-6¢/lb, according to both PCW and Mark Kallman, RTi's v.p. of client services for engineering resins, PS, and PVC. This was on top of a cumulative 7¢/lb drop in April and May. One supplier had issued a 2¢/lb increase for August, a move that went unsupported by the rest of the industry. Suppliers whose price reductions were at the lower end of the 2-6¢ range are likely to be forced to meet the larger decreases in order to stay competitive—5¢ for GPPS and 6¢ for HIPS—noted Kallman. HIPS prices dropped even more as falling butadiene prices, down another 5-7¢/lb in August, were at the lowest level since early 2016. Kallman expected a further compression of the delta between GPPS and HIPS prices, already down to 8-9¢/lb, compared with double digits when butadiene prices were high. Meanwhile, PCW reported that PS spot prices edged lower amid seasonally slow demand. PS imports continued to put pressure on domestic spot pricing. PVC PRICES FLAT-TO-DOWN PVC prices were flat in July, with some potential to drop 1-2¢/lb in August-September, according to Kallman and PCW. Both sources and PVC processors had expected a price decrease of that order in step with falling ethylene monomer prices. However, an outage at Formosa's largest VCM plant at Point Comfort, Texas, brought the company's overall VCM operating rate to 50% of capacity. This led to a force majeure action on some PVC grades, according to Kallman. Based on a 2.75¢ reduction in June ethylene contract prices, and the expec- tation of another 1-2¢/lb drop in the July settlement, PVC processors thought that resin prices ought to fall by 2¢/lb, and some sought a 3¢ reduction. Meanwhile, spot ethylene prices were trading at lows of 18.5-19¢/lb. PET PRICES DOWN BUT FIRMING Domestic bottle-grade prime PET prices in July averaged 55.2¢/lb, down 0.3¢/lb from June, based on PCW's Daily PET Report. (That price represents PET business on a delivered Chicago basis.) On Aug. 2, the price was 55¢/lb, driven by lower costs and plentiful supply of feedstocks (PTA, MEG and PX) in June, despite strong demand from bottlers and packaging manufacturers. However, that trend may be reversing. PET feedstock costs are on the rise. In July, they averaged 51.51¢/lb, up 0.62c/lb from June. August feedstock costs were estimated to be about 52.5¢/lb. So August PET prices were expected to flat or higher. Meanwhile, prices of imported prime PET with an IV of 78 or higher in July averaged 53.5¢/lb, up 2.1¢ from June (on a delivered duty-paid U.S. port basis). The price on Aug. 2 was 53¢/lb. Polypropylene Price Trends Homopolymer JULY AUG Copolymer JULY AUG 0.5¢/lb 0.5¢/lb Polystyrene Price Trends GPPS JULY AUG HIPS JULY AUG 2-6¢/lb PVC Price Trends Pipe JULY AUG Gen. Purpose JULY AUG 2-6¢/lb PET Price Trends Bottle Grade JULY AUG 0.3¢/lb 88 SEPTEMBER 2017 Plastics Technology PTonline.com YO U R B U S I N E S S Resin Pricing Analy sis