The spot resin markets were moderately active, the flow of offers remained brisk, prices were mixed and completed volumes were about average. The industry seemed to shrug off potential supply disruptions which could result from the fire at ExxonMobil’s huge Baytown petrochemical complex; dozens of workers were hurt, but thankfully none of the injuries were life-threatening. Our spot Polypropylene prices, which have been sliding back a bit, firmed up just a penny. Generic Prime Polyethylene prices were mostly steady, though deep discounts were available for offgrade and easy availability continued into August. Polyethylene contract levels have been difficult to gauge, but July should mostly be down $.03/lb. Exports have been good, though traders have been cautious amid geopolitical concerns and trade wars. 

The energy markets began the week strong but finished in negative territory; prices fell sharply after additional China tariffs were announced. WTI Crude futures were up a couple dollars until cratering $4.63/bbl (8%) on Thursday, the biggest single day drop in years. However, prices rebounded nicely on Friday in what could be considered fundamental support in view of recent large inventory declines; the Sept futures contract only ended the week down $.54/bbl to $55.66/bbl. Brent Oil rolled to October and outperformed WTI to the downside, shedding $1.48/bbl to $61.89/bbl. Natural Gas rolled to Sept and prices were volatile, they traded in a 12% range, but only lost a net $.029/mmBtu to $2.121/mmBtu. Spot NGLs had few outlets in the wake of the plant fire. Prompt Ethane prices chunked off a huge $.057/gal, a third of its value, to end the week at $.125/gal ($.0528/lb). Propane also had a large loss, giving back $.05/gal (10%) to $.45/gal ($.127/lb). 

The monomer markets were extremely busy, a very high volume of material changed hands and prices jumped around. Ethylene levels inched higher to start the week and really started to heat up when an explosion rocked the ExxonMobil Baytown Plant and the resulting fire shut down/damaged a flex-cracker. On Thursday, with the extent of the damage still uncertain, buyers came to procure material and the market ran to a high of $.195/lb, up $.04/lb. On Friday, the market pulled back a cent, but still scored a sharp $.03/lb net gain. This action pushed Ethane to Ethylene margins to the widest level in more than a year. PGP also saw high turnover and price volatility, particularly in the forward months. It entered the week under pressure, sliding 2-cents before recovering post fire to limit the loss to just a $.005/lb. The 2019 forward curve is now fairly flat, with less than a penny premium seen by December. The 2020 peak, which has moved out from June to Dec, is nearly $.39/lb. July PGP contracts were priced at $.38/lb, which was up $.015/lb. 

After a very busy July, the spot Polyethylene market just coasted into month end, which came midweek. Although the recent fire at Exxon’s Baytown facility has jolted the monomer markets, it has yet to really affect PE. Our completed transaction volumes were only about average this week, which was a bit of a letdown after such heightened activity. Our official Polyethylene prices were all flat although certain prime products were a little tougher to source for immediate delivery, offgrade remained plentiful and it did not warrant a price uptick. Pricing power is currently in the hands of buyers, which is rare. While there are deep discounts and great opportunities available, some of the low ball bids that we have seen floated are simply too aggressive and unrealistic; otherwise, there are deals to be done. July contract pricing became a little more clear and most PE market participants should see a $.03/lb mark down. Although the relief is welcomed, many will continue to push for further decreases as spot levels have declined even more. If you’ve been able to supplement your purchasing through the spot market you have done well this year. 

The spot Polypropylene market was active throughout July and the heavy trading continued as the new month began. After rallying early in the month as spot monomer costs jumped, PP prices fell under pressure as upstream costs started to ease; however, overall pricing for spot HoPP and CoPP added a penny this week following the fire at Exxon's Baytown plant. Some of this week’s orders were for business as usual, other customers procured material to bridge their late railcars, while some saw supply risk and added a buffer to their resin inventories. Material availability was still good, although not on par with earlier in the month. We saw our regular availability of packaged and bulk truck loads throughout the country - RC's were less prevalent at the end of the week. 

Source: plasticstoday