The spot resin markets began with a bang, but the sizzle began to fizzle before another buying surge sent the week stellar. Initially it was Polyethylene that shone brightly, as good domestic demand met diminishing availability and indications that export offers would be bumped up a couple of cents for May. Late in the week, Polypropylene came into the spotlight as the PGP monomer rally started to accelerate and then it was scoop city for savvy resin buyers, swiftly snatching up those still special offers. 

Commodity PE prices rose $.005 - .01/lb this past week, depending on grade, while spot PP jumped $.02/lb and seems to still be heading higher. Polypropylene contracts will catch a cost-push increase in May, it could be a nickel or even more if monomer continues to run up. The nominated $.03/lb Polyethylene increase is about to reach the milestone of 5 months, as producers will try to increase Polyethylene contracts again in May. The PE market is now firmer, perhaps they will have a little more luck. Resin exports remain strong and domestic downstream resin inventories are low, processors should be joining the buying party. 

The major energy markets were more volatile, and prices ended mixed. Tightening sanctions on Iranian Oil initially sent WTI Crude Oil higher, adding nearly $2.50/bbl by Tuesday. However, the market then reversed, giving up its gains and then some, to end the week at $63.30/bbl, down a net $.77/bbl. Brent Oil saw similar movement, though was able to hold onto a small win of $.18/bbl, ending at $72.15/bbl, and expanded its premium over WTI to almost $9/bbl. Front month Natural Gas futures rolled to June and hovered near multi-year lows before recovering towards the end of the week, picking up a net $.045/mmBtu to $2.58/mmBtu. Ethane was unchanged at $.23/gal ($.097/lb). Propane rebounded from the previous week, adding $.035/gal to $.664/gal ($.188/lb).

 
The monomer markets were active and prices rose; Propylene buyers for a change were those shouting the loudest. The nascent PGP rally gained a better grip and prices jumped $.035/lb, 10%, to $.385/lb. Forward pricing moved in near tandem, Dec now shows a shade below $.43/lb and the June 2020 peak now reaches above $.45/lb. There is still plenty of time before May PGP contracts will be negotiated and the market could change by then, but based on current spot levels, we would expect to see a $.05 - .06/lb increase come through. Ethylene levels edged higher with spurts of activity seen amid spates of calm; by mid-week prompt prices were nearly a cent higher before paring their gains back to end the week at $.135/lb. 

Spot Polyethylene trading activity was very good as April marched on. Completed volumes were a bit above average as buyers, feeling that prices were starting to tick higher, came looking for deals. HDPE and LLDPE film resins added a half-cent, while LDPE for both Film & Injection and LLDPE for Injection were all up a full penny. Prompt availability tightened as resellers’ inventories have thinned and some suppliers withheld offers in anticipation of a better selling environment in May. April contract prices have rolled flat but with spot firming, it seems as if producers will make a more concerted effort to implement their increase next month. PE exports continued strong, with good interest coming from all major international regions. Exports have now reached 33% of all US Polyethylene sales, this trend will continue to grow and remain a very important channel needed to soak up new production that will come online. 

Polypropylene trading was active, buying was strong as market sentiment turned more bullish on the heels of rapidly rising feedstock costs. Well priced offers flowed nicely throughout the week and began to look more appealing to buyers that keep a keen eye on spot Propylene prices and trends. With this week’s 10% rise in monomer costs, May PGP and PP resin contracts are now poised to jump a nickel or more. Our spot PP prices added a penny on each Thursday and Friday for a total of $.02/lb. In terms of completed volume, demand favored HoPP over CoPP and both resellers & processors were seen as prominent buyers. We have been touting the start of a Polypropylene uptrend and have recommended a strategic increase to inventory levels; we have happily followed our own advice and we see additional upside ahead. In the meantime, there are still some relatively good deals available that are worth pursuing. Call or email our trading desk to inquire / buy a current offer or submit a resin request directly on our website. 

Source: theplasticsexchange.com