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  Past Reports
Weekly Market Update
Market Update
June 26, 2015


After an extended period of heightened trading activity, the spot resin markets have begun to slow down. It seems that most of the month’s business has already been booked. Perhaps there will be another small surge of activity ahead, as buyers and sellers square their positions into quarter end. Polypropylene prices have begun to firm again; the spot market was up as much as a penny this past week. On the other hand, a tinge of weakness is permeating the Polyethylene market as weaker International prices are slowing export sales out of North America. Resin producers have nominated a $.05/lb price increase for both Polyethylene and Polypropylene contracts in July. It will be interesting to see how the resin markets develop after many market participants take an early summer holiday break next week.  

World energy markets were mildly mixed amidst low volatility trading. WTI Crude Oil generally traded down during the course of the week. At the closing bell on Friday, a barrel for August delivery cost $59.63, $.34/bbl below the prior week. Brent Oil also saw little change, the August contract ended the week up $.24/bbl to $63.26/bbl. Natural Gas, also ended the week in negative territory, falling just 2.46% lower, $.07/mmBtu, to $2.77/mmBtu. Ethane rolled to July, and ended the week up a half cent to $.19/gal ($.08/lb). July Propane was up at least a nickel, recouping last week’s losses and then some; it headed into the weekend at $.4275/gal ($.121/lb).

The spot Ethylene market was actively traded and ended the week on a down tick. Ethylene for July delivery most recently changed hands around $.355/lb down about a half-cent. With this year’s maintenance and expansion season now over and the much troubled Evangeline pipeline reopened, gulf area crackers are back operating at nearly full capacity. The forward Ethylene curve remains fairly flat, with prices for all months through the end of 2016 quoted within a penny of prompt levels. 

Spot Polyethylene activity slowed this past week. Demand seems to have stalled as implementation of the looming $.05/lb price hike appears increasingly unlikely for July. Perhaps indicative of the waning export market, several slugs of spot PE railcars were offered into the domestic secondary market. Additionally, some national resellers also still had uncommitted railcars to sell prior to month end. We expect another quieter week ahead, considering both quarter end and the US Independence Day holiday.

The spot Propylene market saw few transactions, though the market was pressured lower throughout the week. PGP for July delivery settled Friday below $.36/lb, the lowest price in six years. June contracts settled earlier this month down $.02/lb to $.40/lb. While we have yet to see an initial nomination for July contracts, based on spot conditions, we would expect a slightly lower market ahead. PGP’s forward curve maintains a slight contango shape through Dec 2015; however, the monthly premiums steepen in 2016, until next December prices a full $.05/lb above prompt levels. 

The spot Polypropylene market saw moderate trading activity, with sporadic buy orders sifting through thinning spot supplies. After six weeks of looser availability, the tightening supply/demand dynamic earned the PP market a $.005/lb gain for the week. Notable demand from Mexican buyers was seen scooping up well priced Houston PP inventory.  Fresh offers came at higher prices with resellers citing higher costs, an immediate disconnect between buyers and sellers emerged. Spot generic prime railcars appear expensive to contract buyers, but the tone might change a bit in July as producers pursue their next $.05/lb margin enhancing price increase. Whether this increase will have legs or not remains to be seen.

We wish everyone a safe and happy Fourth of July!

Total Offers 19,832,336 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
LLDPE - Film4,710,980$.630$.730$.620$.660
HDPE - Blow Mold4,050,072$.610$.690$.600$.640
HDPE - Inj3,790,256$.620$.740$.610$.650
LDPE - Film1,714,116$.670$.760$.640$.680
HMWPE - Film1,438,208$.640$.760$.630$.670
PP Homo1,271,288$.630$.730$.625$.665
LDPE - Inj1,085,472$.600$.740$.640$.680
LLDPE - Inj1,058,208$.680$.760$.620$.660
PP Copo713,736$.650$.730$.645$.685
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