| |  |
Click here for a printable version
|
| |
| Add an email to join our distribution list: | | | |
| |
| | |
Summary
The spot resin markets were busy again and prices rose. Demand continued to improve, particularly for Polypropylene, and while resin continued to flow at a relatively swift pace, well-priced offers were snatched up. We anticipate a very modest decrease in May PP contracts. Polyethylene producers are trying to implement their $.04/lb increase that was rolled over in April; however, processors again think otherwise.
The key US energy markets moved in opposite directions. June Crude Oil Futures recovered from steep Friday intraday losses to end the week at $96.04/bbl a net gain of $.43/bbl. Natural Gas first had a 9 week winning streak, but has now recorded its 3rd straight week of losses. The June Nat Gas futures contract gave up $.131/mmBtu to settle at $3.91/mmBtu. The Crude Oil: Natural gas ratio moved out to 24.5:1.
Spot Ethylene prices moved higher in fairly active trading. The market was initially bid up a couple cents early in the week and finally traded up a total of $.04/lb mid-week to levels above $.58/lb. Ethylene for May delivery then changed hands at $.585/lb on Friday. The rally caused the front month’s premium to expand to about $.04/lb over the Dec 2013 price. There are currently three crackers offline for maintenance. Ethane slid a penny to $.28/gal ($.118/lb).
Polyethylene trading was about average; there were offerings for most grades, but not in over-abundant volumes. Offgrade was more available than Generic Prime and the market ticked a penny higher across the board. Producers are taking another shot at their $.04/lb increase that didn’t take hold in April, while processors are instead looking for some relief from the $.09/lb hike endured in the 1st quarter.
Domestic Polyethylene demand was light in April, at 2.42 billion lbs it was almost 140 million lbs below the trailing 12 month average. PE exports ran at 600 million lbs, about 5% less than the 12 month average. Producers countered the slack demand by throttling back April production to 90% of capacity. Collective upstream PE inventories drew down 40 million lbs to begin May with 3.25 billion lbs on hand – still 200 million lbs more than the 12 month average.
Spot Propylene trading was subdued, but the PGP market still firmed and cracked above the $.60/lb barrier. A single transaction for May PGP was heard at $.605/lb, which was up $.0075/lb. The forward curve maintained its slightly backwardated shape; all prices throughout the balance of 2013 are indicated within a penny of prompt levels. May PGP contracts have not settled yet, they are currently nominated to decrease by just a penny. RGP was fairly flat in the low $.50s/lb.
There was a significant increase in spot Polypropylene trading and prices advanced $.015/lb. Firming monomer markets will limit the May PP decrease to only $.01-.02/lb. The spot market seemed to have bottomed in early May and has recently found further support from stronger exports, lifting the floor in the US. Domestic processors that worked their inventories too low expecting more price erosion were also back in the market with both hands.
Domestic Polypropylene processors began rebuilding resin stocks in April and collectively procured 1.33 billion lbs of material – it was about 180 million lbs more than the last 2 month average, but still 40 million lbs less than the trailing 12 month average. Exports were finally back above 50 million lbs, and while not a huge overall factor, it did help soak up offgrade material. Producers still managed to over shoot demand, running reactors above 90% for just the 2nd time in 8 months, and built 20 million lbs of inventory, starting May with 1.62 billion lbs on hand, the most in a year.
Spot trading activity was swift, demand was solid and prices moved higher. Overall availability is still ample, but some grades are now hit or miss. We are seeing a pickup in export demand for both PE and PP, lending support to the market. May contracts for PE and PP are still up in the air, but should see only minor movement.
|
|
Total Offers
23,097,908 lbs
|
Spot
|
Contract
|
| Resin | Total lbs | Low | High | Bid | Offer |
| PP Copo | 3,807,472 | $.660 | $.760 | $.690 | $.730 |
| HDPE - Blow Mold | 3,490,232 | $.640 | $.710 | $.615 | $.655 |
| LLDPE - Film | 2,875,748 | $.630 | $.710 | $.645 | $.685 |
| HMWPE - Film | 2,819,864 | $.650 | $.700 | $.655 | $.695 |
| LDPE - Inj | 2,747,336 | $.660 | $.720 | $.685 | $.725 |
| PP Homo | 2,690,760 | $.640 | $.720 | $.670 | $.710 |
| LDPE - Film | 2,113,312 | $.605 | $.760 | $.695 | $.735 |
| HDPE - Inj | 772,184 | $.640 | $.700 | $.635 | $.675 |
| GPPS | 760,000 | $.890 | $.930 | $.850 | $.900 |
| HIPS | 760,000 | $1.010 | $1.050 | $.970 | $1.020 |
| LLDPE - Inj | 261,000 | $.670 | $.730 | $.645 | $.685 |
|
|
|
|
|
|
|
|
|
|
|
|
|