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  Past Reports
Weekly Market Update
Market Update
August 11, 2017


The spot resin markets began the week slowly, but trading activity heated up as the week wore on. Ultimately a high volume of resin changed hands on The Plastics Exchange, fairly well split amongst the main commodity grades. Prices for some Polyethylene materials firmed while others softened, and in total, they evened out about flat. Polypropylene prices also averaged around steady, though offgrade was a bit weaker and prime a tad stronger. Producers continue to pursue their August price increase initiatives, PE contracts are being invoiced up $.03/lb, and while spot prime railcars are offered including the increase, they are price protected in case the increase does not hold. PP Producers are also trying to raise contracts by $.03-.05/lb this month.

The major energy markets were again mixed, but moved in the opposite direction from the previous week. WTI Crude Oil volatility remained low, the entire $2.24/bbl trading range was established Thurs/Fri. The September futures contract sliced off $.76/bbl to settle Friday at $48.82/bbl. Sept Brent Oil futures shed a slight $.32/bbl and ended the week at $52.10/bbl. Natural Gas prices more than recovered the previous week’s sharp loss, surging $.209/mmBtu, a hefty 7.5%, and went into the weekend at $2.983/mmBtu – but remained below the $3/mmBtu threshold all week.

Spot Ethane prices continue to find small gains this past week, adding another cent to $.27/gal ($.114/lb); Propane prices rallied further, jumping about $.03/gal to $.77/gal ($.219/lb), the highest price since mid-Feb. The spot monomer market saw lots of bids and offers, and while the forward months were actively traded, there were relatively few deals done for prompt delivery. August Ethylene held on to its recent price run-up, but saw little new price change, the last deal seen done at $.2375/lb, just a scant quarter-cent gain. The spot Propylene market was slightly stronger, August PGP prices were bid higher and ended the week around $.385/lb, another fractional gain that could help secure a small contract increase.

Polyethylene trading was surprisingly good, completed volumes were high, particularly for film grade resins. All decently priced HDPE for injection easily found a home, although we clearly found limits that customers were willing to pay. In general, resellers continue to focus on back-to-back transactions, trying to limit the level of uncommitted Polyethylene on hand. Producers continue to pursue their August $.03/lb price increase, though fundamentals are seemingly stacked against it.

For the fifth consecutive month, producers built inventories again in July. During this streak, these collective upstream supplies have bulged more than 700 million lbs to surpass 3.9 billion lbs, a rare tally that has been reached just once in at least the past 11 years. Domestic demand in July was almost the exact average of the trailing 12 months. July PE exports eclipsed 700 million lbs, which were just a little light. Reactor rates again ran above 95%, notwithstanding some resin plant turnarounds ahead, it still makes one wonder how the market could possibly absorb all the new capacity that could begin as soon as the next 5-6 weeks.

Polypropylene trading improved, driven by better demand for both Homopolymer and Copolymer. While offgrade resins generally remain accessible, spot supplies of readily available prime have been a little tighter. PP reactors ran at near full capacity in July, producing nearly 1.55 billion lbs of resin, the most in about 10 years. Total PP demand was solid, more than 50 million lbs above the 12 month average, but there was still an inventory build of more than 40 million lbs.

The Polypropylene market still remains relatively tightly supplied, about 4% below the 12 month average. But still, after many months of disciplined production levels, why finally ratchet reactors up to full throttle with a margin enhancing increase on the table? The timing could be questionable; market fundamentals have been slanted towards bullish but the super heavy production could impact market sentiment and stymie producer efforts to significantly expand margins in August, hmmm.

Total Offers 14,810,216 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
PP Homo4,162,692$.530$.620$.485$.525
HDPE - Blow Mold2,231,864$.525$.540$.480$.520
LDPE - Film1,906,484$.520$.635$.530$.570
LLDPE - Film1,600,944$.560$.610$.500$.540
PP Copo1,280,380$.510$.680$.520$.560
LLDPE - Inj1,273,184$.605$.660$.575$.615
LDPE - Inj1,129,564$.570$.635$.585$.625
HMWPE - Film878,644$.565$.590$.525$.565
HDPE - Inj346,460$.625$.700$.575$.615
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