Forgot your password?
Skip Navigation Links
Click here for a printable version
  Add an email to join our distribution list:  
  Past Reports
Weekly Market Update
Market Update
August 28, 2015


Spot resin trading activity remains heightened and there was a better balance between Polyethylene and Polypropylene transactions. A relatively heavy flow of PE continued to be offered into the market and prices were mostly lower. PP prices were steady to a bit weaker, though we are still only seeing spurts of surplus supply; consequently, that spot market cannot be considered liquid, even the commodity PP grades. While energy prices recovered, monomer markets were mixed and international resin prices continue to slide and together weigh on the market - overall sentiment is still bearish.

The major energy markets reversed course and ended the week sharply higher amid massive volatility. WTI Crude initially continued to erode and made fresh 6+ year lows as the Oct futures contract fell to $37.75/bbl. However, the market then turned around and soared an astonishing 20% to end the week at $45.22/bbl, a net gain of $4.77/bbl. Oct Brent Oil futures also had a wild ride and settled Friday at $50.05/bbl, near the top of its $8.76/bbl range. Natural Gas had a comparatively mellow week, the Oct futures contract added just $.018/mmBtu for the week, as it closed Friday at $2.715/mmBtu. Spot Ethane was essentially unchanged, again ending just shy of $.19/gal ($.08/lb); however, Propane behaved like the oil markets, starting lower before jumping 18% to a net gain of more than 3-cents at $.4075/gal ($.115/lb).

The Spot Ethylene market also saw a volatile week; it began by falling down near the cycle low of $.22/lb before staging a solid comeback. August Ethylene ticked higher and higher in a series of transactions, reaching above $.26/lb midweek as a very high volume of material changed hands. The market continued to rise, peaking near $.28/lb before settling back around $.25/lb, for a net penny gain. There were a few production issues, both planned and unexpected, but overall Ethylene production remains solid. Ethylene’s forward curve is slightly contango, rising to $.2725/lb by March 2016 before tapering off just a tad.

Spot Polyethylene trading was above average, material availability continued to grow and pushed prices lower. All commodity grades of Polyethylene have been readily available, in both railcars and packaged truckloads, for immediate shipment and at well-discounted prices. Spot buyers in need of material were pleased to pick away given the lower costs, while contract buyers eyed another decrease for September. Although most Polyethylene producers offered to decrease August contracts by $.03/lb, processors sought additional relief. Spot prices were already down at least $.05/lb, with Houston prices quite a bit weaker, therefore late in the month, several producers agreed to a larger decline of $.05/lb. With International Polyethylene prices still well below domestic levels, and the desire to move material offshore remaining, fresh railcar offers to Houston have dropped into the $.40s/lb. With domestic prices at such a premium, it will be hard to roll contract prices over in September, so another decrease could be forthcoming.

The spot Propylene market was lightly traded and prices fell further. The only outright physical PGP transaction was for September delivery at $.2625/lb, almost $.02/lb below the last level where August PGP had sold. With August essentially over, this Sept transaction represents a new low prompt PGP price for this cycle and a full $.50/lb below the peak in October 2014. August PGP contracts settled around mid-month at $.33/lb, down $.035/lb. Based on current spot prices, we would expect another $.03-.04/lb to come out of September PGP contracts. The PGP forward curve shows that prices are set to soften over the balance of 2015 and then rise a couple of cents to $.28/lb over the course of 2016. RGP sold all the way down to $.155/lb.

Polypropylene market conditions continue to be characterized by limited availability and good demand, yet prices are still falling as monomer costs crumble - dragging down contracts. Spot prices have been sliding too, particularly for offgrade. After many years of minimal margin, PP producers are now having some time in the sun, as they exploit these market conditions to expand margins. Although PGP contracts dropped $.035/lb this month, producers are trying to get a net $.015/lb price increase, but it is well contested. As we have seen throughout 2015, there will likely be a range of results based on individual negotiations and even before this nickel we have seen margins expand at least a dime.

Total Offers 15,069,344 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
HDPE - Inj3,422,348$.510$.620$.530$.570
LLDPE - Film3,105,220$.540$.630$.530$.570
LDPE - Film2,209,864$.570$.660$.560$.600
HDPE - Blow Mold1,940,048$.510$.585$.520$.560
PP Copo1,089,104$.590$.725$.580$.620
HMWPE - Film1,085,472$.575$.630$.550$.590
PP Homo780,460$.560$.650$.560$.600
LLDPE - Inj732,736$.560$.620$.560$.600
LDPE - Inj704,092$.580$.670$.580$.620
Privacy Statement | Copyright © 2014 The Plastics Exchange. LLC. | Patent Protected | All Rights Reserved.