Plastics News - May 20, 2019 - 28

28 * Plastics News, May 20, 2019

'Polymer Points' by
Frank Esposito is a
monthly column that looks
at the resin industry.

PE, PS prices spring up in April, PET slides

P

olyethylene
provided
the most drama in commodity resin markets for
April, as North American
PE makers needed considerable
effort to push through a 3-centper-pound price increase.
Regional prices for solid polystyrene were up for the month,
PET bottle resin was down 1
cent and polypropylene was surprisingly flat. Final April prices
for PVC resin were still being negotiated as of May 15.
Regional prices for all PE
grades had been flat for the first
three months of 2019, as buyers
were able to ward off a 6-cent
hike that major PE makers first
announced for Jan. 1. Market
watchers had thought that 3
cents of the 6 cents would take
hold in February, but market fundamentals did not support that
move and buyers were able to
resist the increase before it finally took hold late in the month,
market sources told Plastics
News.
PE prices had slid 3 cents in
both November and December.
Market watchers cited lower oil
prices and lower global demand,
especially from packaging. Oil
prices affect global resin markets, even though most North
American PE is made from natural gas.
West Texas Intermediate crude
oil prices began 2019 around $48
per barrel but were near $61.50

RESIN PRICING
Average pricing changes for April in cents per pound.
5

'Oil prices are at a six-month high, but
ethylene [feedstock] prices are at a fourmonth low. The bottom line is there's too
much resin right now.'
Mike Burns
Resin Technology Inc.

4
+4
cents
Solid
PS

3
2
1
0
-1

Flat, PP

+3
cents
PE

Tariff challenges
PVC still
being
negotiated

-1 cent
PET

-2
-3
-4
-5

in early trading May 2 for an increase of more than 28 percent.
Prices were near $62.30 on May
15.
The challenge facing the global PE market is an overly abundant supply of material, according to Mike Burns, a PE market
analyst with Resin Technology
Inc. in Fort Worth, Texas.
"Oil prices are at a six-month
high, but ethylene [feedstock]
prices are at a four-month low,"
Burns said May 2. "The bottom

line is there's too much resin
right now."
Global PE demand "is very
good, but [PE] resin prices have
been lower than expected because of new supply," he added.
Many North American PE makers have added capacity in recent years to capitalize on newfound supplies of natural gas
in the region. Much of this new
supply has been tagged for export markets, although domestic
PE demand has remained solid.

On a global basis, North American PE makers are being impacted by tariff-based challenges in
selling excess material into China, according to a recent blog
post from John Richardson of
the ICIS consulting firm in London.
U.S. LLDPE exports to China
are down 53 percent so far in
2019.
"Eleven years ago, the U.S.
would have been under less pressure to make compromises in the
trade war that has led to a sharp
fall in its LLDPE exports to China," Richardson wrote. "But in
2009, China became the world's
biggest consumer by volume of
LLDPE, overtaking the U.S. and
the [European Union]."
U.S. LLDPE exports to China
have fallen very steeply since
September 2018 following the
imposition of 25 percent duties
by China as part of the trade
war," he added. "This is terrible
timing for the U.S. LLDPE indus-

try because it is undergoing a big
wave of capacity expansions,"
Richardson wrote, adding that
China's dominant position as the
world's biggest consumer and
importer of energy, petrochemicals and agricultural products
"gives it strong leverage in trade
talks."

Solid PS up
North American solid PS prices also moved up in April, increasing by an average of 4 cents
per pound, according to sources
contacted by Plastics News. That
move was prompted by a rise
in prices of benzene feedstock,
which is used to make styrene
monomer.
Benzene prices for April were
up 23 cents to $2.25 per gallon.
The PS hike is the second consecutive monthly increase for
the material. Prices in March had
moved up an average of 2 cents
per pound.
PS maker Trinseo of Berwyn,
Pa., reported that its global PS
sales were down 5 percent to
$228 million in the first quarter
of 2019. Officials said that the
decline was mainly due to passthrough pricing, which was partially offset by higher sales from
customer restocking and more
favorable market conditions.

PET drops

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Regional prices for PET bottle resin declined by an average
of 1 cent per pound since April
1. PET prices were affected by
prices for related feedstocks,
including paraxylene and PTA,
sources said.
The 1-cent decline for PET in
April erases a 1-cent gain that
prices had shown in March.
Prices for the material also had
been up 1 cent in February after
declining by 1 cent in December.
The net result of these moves
is that PET prices are up only 1
cent per pound since Jan. 1.
Global PET maker Indorama
Ventures of Thailand reported that its first-quarter combined production volumes for
virgin PET, recycled PET and
paraxylene and PTA feedstocks
were up almost 40 percent.
First-quarter operating rates for
those materials checked in at 88
percent.



Plastics News - May 20, 2019

Table of Contents for the Digital Edition of Plastics News - May 20, 2019

Plastics News - May 20, 2019 - 1
Plastics News - May 20, 2019 - 2
Plastics News - May 20, 2019 - 3
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