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  Past Reports
Weekly Market Update
Market Update
July 22, 2016


Spot resin trading continued to ratchet up and by the end of the week was finally considered busy – it has been a while since we’ve had this level of activity. Polyethylene demand was solid and prices were mostly steady, though LDPE posted another penny gain. Polypropylene demand was relatively good, but at times inconsistent; offgrade pricing remained weak, and prime gave back some recent gains. Export interest from Europe has waned a bit, Latin American is average / good, and while Asian pricing has advanced a bit, it is still discounted to US levels.

WTI Crude Oil fell more than 5%; September, the new front month futures contract, dropped $2.46/bbl to $44.19/bbl, the lowest in 3 full months. September Natural Gas edged up $.015/mmBtu to $2.756/mmBtu. Ethylene rallied further, reaching $.30/lb+, but then eased back to $.28/lb. Polymer Grade Propylene pushed up above $.31/lb. Ethane ended the week around $.195/gal ($.082/lb); Propane shed about a cent near $.48/gal ($.136/lb).

The Polyethylene market is finally back from summer vacation; our trading desk has been fielding a steady flow of orders from customer needs, practically across the entire slate of PE products. Overall demand has been fairly solid, even while lower prices were expected and it seems that many processors are still short of material. Continued production issues due to planned and unexpected outages, have limited supplies of most LDPE and LLDPE grades, dashing hopes for contract price relief in July.

On the other hand, HDPE for all blow molding, injection and film processes are readily available, at least in limited quantities. Consequently, we have seen a little weakness in pricing, particularly offgrade and prime for export. LDPE and LLDPE, both film and injection grades have been very snug, but we have seen a slight improvement in availability. However, spot railcars are quickly placed just as they trickle in, as it seems that some traders are still out covering old orders where their supply had failed to materialize.

Processor requests have generally begun with lower price ideas, but transactions have been concluding at steady to higher levels as their competitive offers have not been substantiated. Domestic Prime Polyethylene prices have found some strength as July contracts will likely roll flat and the spot market recovers the little discount that it had developed. Sorry processors, but there is always August…

Spot Polypropylene trading has been erratic; there were good spurts of demand when the market began to tighten up, but buyers scattered quickly with any signs of price weakness. The PP market came down hard from March-May and seemed to stabilize in June when processors stepped up to the plate and took a good swing as prices were just too good to resist. However, the PP market appears to be taking another dip lower amid another wave of supply that cannot seem to clear.

The flood of imports earlier this year that turned the market from tight to loose, seemed to be concentrated in Copolymer materials. The more recent oversupply has been from domestic Homopolymer production. As the overall bearish market languishes, those importers that tried to wait out the trough, have begun liquidating unsold inventories that they had previously just tucked away and packaged Copo is now nearly as plentiful as Homo. This seems to be limiting a quick rebound.

We still recognize that PP prices along the range of the $.40s and into $.50s/lb are a tremendous value on a historic basis. In time, we believe these levels will again look very cheap and the industry will view this period as a great procurement opportunity.

Total Offers 14,046,756 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
HDPE - Blow Mold4,311,704$.490$.560$.490$.530
PP Homo2,048,748$.450$.555$.460$.500
LDPE - Film1,947,404$.580$.680$.610$.650
LLDPE - Film1,364,208$.530$.580$.520$.560
HDPE - Inj1,282,300$.525$.560$.490$.530
HMWPE - Film1,041,380$.550$.590$.520$.560
PP Copo918,552$.510$.620$.480$.520
LDPE - Inj808,368$.570$.660$.600$.640
LLDPE - Inj324,092$.570$.640$.590$.630
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