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  Past Reports
Weekly Market Update
Market Update
June 17, 2016


Spot resin trading improved, but monthly transactional volumes still lagged below historical averages. Market sentiment remains skewed towards negative and processors have generally been limiting purchases to minimal levels expecting lower prices ahead. While overall prices for both Polyethylene and Polypropylene were soft, particularly offgrade, Generic Prime mostly held steady this week.

July WTI Crude Oil was sharply lower, but recovered Friday to pare its losses to just more than $1/bbl, ending the week at $47.98/bbl. July Natural Gas rose further, adding another $.067/mmBtu to $2.623/mmBtu. NGLs were lower; Ethane shed more than 7%, while Propane saw just a modest loss. Ethylene eased back fractionally to $.255/lb, PGP edged a tad higher to just above $.305/lb.

The spot Polyethylene market has remained slow. Overall deal flow is still sporadic, but supplies of certain scarce materials, including LDPE for film and high flow LLDPE, began to show to complete open orders. While there was a fairly steady flow of offers for traditionally high volume commodity Polyethylene resins, pricing was not compelling enough to interest processors other than for immediate and urgent needs.

Processors have been pushing for a price decrease, hoping to peel off the $.04/lb increase that was implemented back in April. Anecdotally, many have minimized direct contract orders, opting to work down inventories in order to buy more patience. In the meantime, as downstream resin supplies thin, periodic delays in railcar shipments have created the need for urgent loads. Some resellers, perhaps expecting cheaper prices to already be prevalent, also appear to have taken orders on the come and require interim material.

Polyethylene producers seem intent on holding on to this price level through June. They seem to still be building inventories rather than inundating the market with an abundance of Generic Prime resin, which would knock the price. Incremental PE exports continue to be challenged, even as supplies start to back up in Houston and prices begin to slip.

The spot Polypropylene market was challenged by sluggish demand, led by ample supplies and expectations for still lower prices ahead. While resellers look to move their uncommitted imported resin stocks, producers have maintained high operating rates, thus keeping downward pricing pressure on the market. PP contracts have mostly declined $.10/lb during the second quarter, with the second nickel decrease implemented in June. Spot prices continued to slide with a level of consolidation seen, as previous market leading prices have been matched by others.

Resellers have mostly imported Copolymer and as those pockets of supply disappear, there is sometimes a price jump sticker shock for spot domestic CoPP material. In general, spot domestic PP Homopolymer is much more available and cheaper than Copolymer, providing some processors with unrealistic pricing expectations.

The HoPP market has become liquid again in Houston as producers purge product destined for export. These export channels, which were relatively dormant for years, are being redeveloped to sell off fresh production and liquidate excess material to keep inventories from growing further.

Total Offers 17,217,092 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
PP Homo5,807,360$.460$.560$.470$.510
HDPE - Blow Mold2,672,784$.500$.560$.490$.530
LDPE - Film1,646,852$.600$.690$.590$.630
LLDPE - Inj1,606,300$.560$.640$.580$.620
LLDPE - Film1,557,288$.450$.590$.520$.560
HDPE - Inj1,411,472$.510$.590$.490$.530
PP Copo1,164,104$.470$.610$.500$.540
HMWPE - Film749,564$.475$.575$.520$.560
LDPE - Inj601,368$.530$.600$.590$.630
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