What The Trade Is Saying |
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Market Update & Summary July 23, 2010:
After several weeks of heightened activity, spot resin trading has slowed a bit. Price movement was again mixed; Polyethylene prices were steady to a penny lower and Polypropylene prices recovering another cent. Spot monomer prices were also mixed and in a tight range. Gulf petrochemical plants were initially mindful that Tropical Storm Bonnie could cause trouble, but it will now pass without incident.
The overall Polyethylene complex remains under pressure. Most PE grades were marked a penny lower this week including HDPE injection, HMW for film, and LLDPE Butene for film. HDPE blow molding prices, which had been the weakest grade, held steady; spot prices are down $.17/lb from the April peak, back within the range last seen during January. LDPE prices remain buoyed; steady again this week and still just a few cents off its April peak.
A level of clarity has finally been seen with regard to July Polyethylene contracts. After a long month of negotiations, average Polyethylene contracts for HD and LL will be down $.02/lb, retracing $.14/lb of the 1st quarter gains, leaving $.04/lb still out there. LDPE will be held steady in July, keeping contract prices $.10/lb higher for the year. The industry in general has not issued price increase notices for August.
Market Update & Summary July 16, 2010:
The spot resin markets were fairly busy again this week; there was a steady flow of demand and quite a number of deals were concluded. As in the previous week, prices were mixed, with the Polyethylene market still under pressure while Polypropylene continued to recover. Spot monomer prices firmed, spurred along by a fresh cracker outage. Spot exports slowed a bit; there is a currently large spread between domestic and Houston export prices.
The U.S. Energy markets were relatively calm. Crude Oil for August delivery shed just $.08/bbl to close at $76.01/bbl. After 3 weeks of losses, Natural Gas futures finally posted a gain; the August contract recovered $.119/mmBtu to end the week at $4.519/mmBtu. The Crude Oil: Nat Gas price ratio sits now just below 17:1, still very wide compared to the 6:1 ratio that is considered parity.
Spot Polyethylene prices were mostly lower this week, with a variance again seen between grades. HDPE prices for blow molding, film, and injection all fell between $.01-.02/lb. Film grades remain more scarcely supplied and consequently, prices for LLDPE and LDPE held steady. A high profile auction for HDPE blow molding basis Houston ended about $.02/lb lower than the previous auction earlier in July.
Polyethylene contract negotiations persist, with buyers looking to pull prices down another $.02-.04/lb in July. Contract prices for all commodity Polyethylene grades increased $.18/lb during the first quarter of 2010; HDPE/LLDPE contracts came off $.12/lb in May/June while LDPE prices were only relieved $.08/lb.
Market Update & Summary July 9, 2010:
The spot resin markets were busier this past week; transacted volumes increased and prices were mixed. Polyethylene lost about a penny and it looks like Polypropylene found it. The overall domestic market was slightly softer, while export demand and prices firmed. Spot resin demand was very good and noticeably stronger than in previous weeks. It is interesting that prices along commodity resin supply chains moved in concert: Crude Oil, Propane, Propylene and Polypropylene prices were all stronger; while Natural Gas, Ethane, Ethylene and Polyethylene prices all fell.
Polyethylene prices dropped about $.01/lb this past week, with fluctuations seen between grades. There was some evening up to do as June contracts settled a bit weaker than some had expected. As in May, HDPE and LLDPE contract prices peeled off $.06/lb; entering July still $.06/lb higher for 2010. LDPE fell $.04/lb in both May and June, holding on to $.10/lb of first quarter gains. Contract buyers are looking for further relief in July; early producer sentiment is that the extra relief was seen in June.
Market Update & Summary July 7, 2010:
The spot commodity resin markets were relatively slow as the 4th of July weekend approached. It was the end of the 2nd quarter, and with most of June’s business already booked, many market participants took an extended holiday. Polyethylene prices nudged a penny higher on Monday and remained at that level for the balance of the week. Spot Polypropylene prices rallied $.02/lb and currently sit $.03/lb above the June lows. The Spot monomer markets dropped this past week.
After a month of heated negotiations, June Polyethylene contract pricing finally settled. HDPE and LLDPE were down $.06/lb, while LDPE was $.04/lb lower. This was considered a win for processors as producers had held firm late in the month, trying to relieve prices by $.02/lb less. Late in the week a Polyethylene producer announced a $.04/lb increase for August for Higher Alpha Olefins (HAO) LLDPE and LDPE resins; others have yet to follow.
Ethylene for July delivery transacted up a half-cent on Monday to $.36/lb, but fell the rest of the week. Spot prices were pummeled on Friday in active trade, ending the week at $.30/lb, for a 15% loss. The June Ethylene NTP was reportedly down $.0525/lb from May, settling at $.395/lb.
Polypropylene contracts followed PGP monomer lower; both settling down $.08/lb in June. Propylene markets were quiet, RGP shed a quarter-cent to $.4275; once again spot PGP went un-traded. Initial settlements for July PGP contracts emerged at $.555/lb, which would be steady from June. If the initial steady July PGP agreement solidifies market-wide, expect Polypropylene contract prices to also remain steady in July.
The key U.S. Energy markets both moved lower this past week. Crude Oil for August delivery tumbled $6.72/bbl to close at $72.14/bbl on Friday. August Natural Gas futures prices continued to slide, falling $.221/mmBtu, ending the week at $4.687/mmBtu. The Crude Oil: Nat Gas price ratio shrank to 15.3:1.
The export market heated up a bit; a number of European traders were in the market seeking Polyethylene at prices not seen for several weeks. As the dollar weakened, bids increased and a number of deals were seen concluded at prices $.02-.03/lb higher than recent levels. Spot supplies of certain resins that had been plentiful, such as LLDPE Butene and HDPE blow molding, began to tighten.
Spot supplies of Polypropylene, both domestic and export, are significantly shorter than in recent weeks.
After rising $.22/lb through April, Polypropylene contracts gave back $.20/lb during May/June, for a net gain of $.02/lb for the first half of 2010. Contract Polyethylene prices ran up $.18/lb through March, were steady in April and dropped $.12/lb in May/June, while average LDPE prices were down just $.08/lb.
Market Update & Summary July 1, 2010:
Dow Chemical - POLYETHYLENE RESIN PRICE INCREASE EFFECTIVE AUGUST 1, 2010