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  Past Reports
Weekly Market Update
Market Update
October 13, 2017


The spot resin markets continued to trade somewhat sporadically, with both periods of quiet and then sudden surges of strong activity. While completed volumes remained well ahead of historic averages, the market has been shifting away from urgent post hurricane procurement required to keep processor plants running smoothly, more towards a toppy, buy ‘em as you need ‘em type environment. Although material is still generally tight, domestic demand has slowed, which contributed to a moderate accumulation of offers. This in turn has begun to weigh on both Polyethylene and Polypropylene spot prices, by peeling off of some of their Harvey driven premiums.

In a reversal of the previous week’s results, the major US energy markets began the week on the lows and ended on the highs. WTI Crude Oil futures flirted with the key $50/bbl level and then began to rise; the November futures contract ultimately added $2.16/bbl to settle Friday at $51.45/bbl. Brent Oil was again less volatile than WTI, this week it added a more modest $1.55/bbl and headed into the weekend at $57.17/bbl. Natural Gas was this past week’s big winner, the Nov contract notched a solid $.137/mmBtu gain to reach a clean $3.00/mmBtu.

The spot monomer markets remained on the slow side as prices softened. Ethylene for October delivery had traded down about two-cents when it last changed hands late in the week at $.2825/lb. Propylene trading was relatively active early in the week and prices chipped off in a series of transactions. By Friday, PGP for October delivery had fallen $.025/lb to $.45/lb. As a reminder, Sept PGP contracts settled with a 7-cent increase to $.465/lb; current spot levels still support a small rise for October. Spot Ethane shed a quarter-cent to $.2625/gal ($.11/lb); Propane trudged a bit higher, rising another $.015/gal to $.945/gal ($.27/lb).

The spot Polyethylene market saw a smattering of transactions spread widely across the full slate of commodity grades; activity was reminiscent of our typical business, as opposed to the mad scramble to secure scarce material that we had seen for much of the past 6 weeks. All PE producers nominated at least $.07/lb of price increases with staggered implementation dates through mid-Oct; this should all be solid. There are several producers with an additional $.04/lb on the table, but with supply conditions normalizing, this extra increase has become questionable.

As a result of the hurricane induced supply disruptions, spot PE prices quickly shot up between $.10-.18/lb. As conditions started to return towards a more normal state over the past couple weeks, part of the steep gains have eroded by as much $.03-.05/lb. However, some PE grades remain very snug including HDPE copolymer for both blow molding and pails, as opposed to HDPE homopolymer for milk bottles and crates, which is more available. LLDPE Hexene is still scarce, though Butene is readily available to ship. LDPE film grades have moved from tight to almost loose and these prices have recently been pressured down the most.

Spot Polypropylene trading was very good, while both supply and demand have at times disappointed, this has been a need driven market and transactions come together as urgency requires. Prime HoPP and CoPP offers have been hard to come by, but a fairly steady flow of good offgrade railcars has continued to pelt the market and the material has consistently cleared very quickly. HoPP prices rose as much as $.16/lb in Harvey’s wake, but pulled back a couple cents this past week, CoPP eased an additional penny.

PP prices mostly gathered in the mid-to-higher $.60s/lb and we have seen fierce push-back when presenting offers that start with a 7. Producers averaged a $.105/lb increase during Aug/Sept, supported by a $.075/lb rise in PGP monomer costs and tight supply / demand dynamics that supported a $.03/lb margin gain, mostly in Sept. There are additional increases on the table for Oct, but the market seems to be losing its upward momentum.

Total Offers 15,121,152 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
LLDPE - Film3,040,992$.630$.740$.610$.650
LDPE - Film2,708,508$.670$.760$.640$.680
HDPE - Blow Mold2,542,348$.660$.710$.640$.680
PP Copo1,772,840$.660$.760$.660$.700
PP Homo1,600,024$.640$.720$.620$.660
LLDPE - Inj1,058,208$.700$.760$.670$.710
HMWPE - Film881,840$.670$.720$.650$.690
HDPE - Inj763,196$.660$.800$.750$.790
LDPE - Inj753,196$.660$.740$.660$.700
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