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  Past Reports
Weekly Market Update
Market Update
October 11, 2019


The spot resin markets were very busy, demand was strong and while supply was available, it was not simply free flowing. Most fresh prime Polyethylene offers were priced 2-3 cents higher than late Sept levels, and while offgrade material was more plentiful, it was still priced up 1-2 cents. There was very little tire-kicking as participants came to deal and consequently, our trading desk completed the vast majority of realistic opportunities presented. With the Sept $.03/lb PE increase intact, producers have been maintaining some upward pressure on the market, but not really pushing to advance the extra $.04/lb increase which is on the table for October. Polypropylene trading was good, but off its recent pace. Spot PP prices moved up a cent on tighter supplies but remain a relative bargain compared to higher priced contracts. The export market remains hot and Houston packaging facilities are still congested.

The major energy markets were mixed as price volatility subsided. WTI Crude Oil saw little movement until Thursday when prices turned higher and gains accelerated on Friday, the Nov futures contract ended the week at $54.70/bbl, up $1.89/bbl. The upward momentum was linked to the chatter of positive US-China trade talks, along with news of an alleged attack on an Iranian owned oil tanker which occurred 60 miles off the shores of Saudi Arabia. Following the news, Brent Oil also jumped and outperformed WTI, adding $2.14/bbl to $60.51/bbl. Nat Gas futures reversed its recent rally and fell every day this past week, the Nov contract gave back a hefty $.138/mmBtu to finish Friday at $2.214/mmBtu. Ethane shed a small $.003/gal to $.192/gal ($.081/lb); Propane moved in the opposite direction, adding $.015/gal to $.467/gal ($.132/lb).

The monomer markets continued to transact at an active rate; large volumes of material changed hands while prices fell. Spot Ethylene began the week under pressure and prompt material quickly lopped off a cent to $.265/lb. The market continued to lose value from there, eroding at least a penny per day and by Friday, October Ethylene prices had been decimated, losing $.07/lb, about 25% of its value, to settle the week at just $.2075/lb. Forward Ethylene prices were also crushed, Dec 2020 is now priced at only $.145/lb. Propylene also saw good interest for both spot and future deliveries and prices turned lower. Transactions occurred throughout the week with the heaviest volume on Friday and by the end of day, spot PGP had diced off $.0125/lb, to end at $.355/lb. Sept PGP was up a cent and current spot levels now suggest that the penny could come back out in Oct, but there is still plenty of time before negotiations conclude.

The spot Polyethylene market seemed to find its groove as the pace ramped up again in October. Our trading desk was busy throughout the week filling a consistent flow of resin requests and finding homes for well-priced supplier offers. There has been a run on LDPE Clarity which has seen its premium again expand nicely over other film grades; HDPE Blow molding has also caught a bid, driven by better demand and lack of spot supply. While there is plenty of material available if one can wait 2 weeks for fresh railcars to arrive, prime material ready for immediate pickup can often be a challenge to secure as resellers seem to be limiting their uncommitted inventory kept on hand. Processors are recognizing the reality of the enabled $.03/lb September contract price increase and we finally saw spot prices firm up a penny midweek. If prices continue to creep higher along with some sort of supply disruption or sustained bullish fundamental, the next $.04/lb increase could also prove viable. The wild card could be the escalation of Middle East tensions as an Iranian oil tanker was apparently attacked on Friday. The crude markets once again shrugged off this news and its not clear whether these smaller dust ups will have a lasting effect. Settling the trade dispute with China and lifting of sanctions would also be a boon to the markets, and while there have been signs of light, a full agreement remains elusive.

Polypropylene trading relaxed a tad, but activity was still solid. Processors were out seeking spot railcars while resellers secured packaged truckloads to satisfy their prompt customer needs. CoPP changed hands more frequently than HoPP, and given favorable pricing, buyers seemed pleased to procure offgrade over prime. Railcar offers were less abundant than previous weeks and as a result of the tighter supply, prices for both HoPP and CoPP increased a penny. While Polypropylene production has essentially remained on par, exports have continued to grow. Monthly offshore shipments are often running twice year ago levels or more and have been soaking up surplus material. It seems that an increase in exports has been targeted as a larger sales channel, perhaps in anticipation of the new planned production slated to come online over the next year. PP contracts followed monomer up a penny in Sept and could give it back in Oct, but either way, barring a supply upset, we see low volatility in contract pricing.

Total Offers 15,276,908 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
PP Copo2,921,380$.480$.575$.500$.540
HDPE - Blow Mold2,251,772$.380$.465$.380$.420
LDPE - Film2,169,152$.480$.545$.460$.500
PP Homo2,015,748$.485$.560$.480$.520
HDPE - Inj1,995,680$.390$.480$.380$.420
LLDPE - Inj1,500,208$.485$.535$.450$.490
LLDPE - Film970,024$.400$.495$.390$.430
HMWPE - Film881,840$.390$.465$.380$.420
LDPE - Inj571,104$.450$.525$.450$.490
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