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  Past Reports
Weekly Market Update
ThePlasticsExchange.com
Market Update
January 12, 2018

Summary

The spot resin markets remained extremely busy; our activity and completed volumes surpassed the previous week, which had so far been our best week of the year ;-) Processors still seem to be catching up with purchases and doing some inventory restocking, as many had limited their buying into year-end. Spot supplies of both PE and PP, which have both been fairly snug in this young year, improved a tad. Still, spot resin prices have been on an upswing, with fresh gains of $.01-.04/lb seen. We expect PP contracts to soar by as much as $.10/lb in Jan. There is also a $.04/lb PE increase nominated for Feb.

The major energy markets rallied sharply in very active trading. Feb WTI Crude futures surged $2.86/bbl, nearly 5%, to $64.30/bbl, the highest level since Dec 2014. March Brent Oil futures added $2.25/bbl to settle Friday at $69.87/bbl – it had briefly reached above $70/bbl. Natural Gas began on its low and ended near its high, in between rocketing $.405/mmBtu, 14%, to $3.20/mmBtu. Spot Ethane added $.03/gal to $.275/gal ($.116/lb). Spot Propane prices slipped $.015/gal to $.925/gal ($.262/lb).

The monomer markets continued to move in opposite directions. Spot Ethylene shed more than a cent to $.275/lb. Propylene supplies remain very tight due to complications at two PDH units, while Ethane also remains favored over Propane as a feedstock to crack, limiting Propylene production. As such, prices continued to rise, with PGP adding at least another $.03/lb to $.60/lb. The forward market through June is priced around this level, currently indicating no real relief is expected in the near/mid-term. Based on spot levels, we would expect Jan PGP contracts to increase in the vicinity of $.10/lb or maybe more.

Spot Polyethylene trading was strong, processors were seen as aggressive buyers, scooping up well-priced offers and willing to pay up as needed. Volumes were high and done deals well spread among the major commodity PE grades. Those resins like HDPE, including all film, injection and blow mold, whose prices were hit the hardest during the 4th quarter, has been recovering the most. Recent big winners include HMWPE which added $.04/lb and LDPE film, which jumped $.03/lb as it rebuilds its premium to LLDPE. There was still some confusion with regard to contract pricing, as some found relief in Dec, but results varied by market participant. The sharp break in spot levels agreed with a decrease. To the surprise of most, all major PE producers have now issued a $.04/lb price increase for Feb.

The Polypropylene market has gone from ho-hum to hold your hat! PP contracts in January should see a cost-push increase of around a dime, with no major relief in sight. Buyers, eyeing higher prices ahead, have been grabbing every seemingly good deal in sight, sending prices up another $.02-.03/lb. Current availability has been dwindling, CoPP and all high flow PP is quite scarce. Strong PP production, which led to upstream inventory builds in each of the last 3 months, has returned total supplies to almost average. However, there is pent up demand from previous processor destocking, so market dynamics remain bullish. There has been a relatively steady stream of PP imports as part of overall supply strategy, initially sparked by the fierce PP rally 2 years ago, but we are again starting to see some speculative imports on the water, soon to hit the shores.

Total Offers 12,457,644 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
HDPE - Inj3,284,968$.545$.630$.560$.600
LLDPE - Film2,019,544$.590$.680$.560$.600
LDPE - Film1,673,404$.580$.665$.580$.620
HDPE - Blow Mold1,333,288$.580$.640$.560$.600
PP Copo1,245,920$.650$.790$.690$.730
HMWPE - Film970,024$.610$.660$.590$.630
LLDPE - Inj705,472$.650$.720$.625$.665
LDPE - Inj705,472$.590$.670$.595$.635
PP Homo519,552$.645$.740$.660$.700
 
 
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