Page 66 - Plastics News - January 2024

ver was strong, making it one of the
PlasticsExchange’s highest weekly tal-
lies of 2023. The heavy buying came
from processors that had de-stocked
in anticipation of stellar December
pricing that never materialized. In-
stead, upward cost pressures have
kept PP prices elevated. In fact, spot
prices rose another penny this week
and are again nearing the interim highs
of this rally, which were set a month
ago. Producers had plenty of railcars
to sell, however, and they were fairly
liberal on prices in exchange for vol-
ume. Buyers who ran out of time
PE contracts could easily see a de- ditional buying opportunities are ex- to wait paid a pretty premium for
crease in December, perhaps peeling pected to be available in the Houston prompt PP ready to ship.
off the last $0.03/lb implemented in market, as dealers try to unload more December PP contracts headed
September, as producers have already packaged material to avoid year-end for rollover
rolled their current nomination into inventory taxes. Meanwhile, the de-
January. Transactional prices are well cline in domestic and export pricing On the contract front, expectations of
below levels reflecting the $0.09/lb makes a December contract increase moderate relief from the past three
months of PGP-led increases totaling
increase that the major indices have even more unlikely — it may even $0.135/lb have fallen by the wayside,
recorded so far in 2023. PP contracts drop $0.03/lb, according to the Plas- as monomer production struggles.
are now tracking more toward a roll- ticsExchange. A decrease would be
over rather than a decrease, as mono- justified but may only provide tempo- December PP contracts are cur-
mer costs have firmed back up. rary relief, as producers have already rently heading toward a rollover un-
less something comes to influence the
nominated a nickel for January.
More end-of-year buying op- market prior to completion of nego-
portunities expected in Houston The market got its first look at No- tiations. Preliminary results released
market vember supply/demand results from by the ACC showed that PP produc-
PE trading slowed compared to the American Chemistry Council ers ran their reactors a little harder in
the buying frenzy at the start of the (ACC), which showed that PE produc- November, at around 80%. Exports
month, but the flow of transactions tion was almost identical to October, were a bit stronger, but at 6.6% of
was still good as prices eased, reports as reactors again ran just shy of 85% total sales, PP exports are not a mas-
the PlasticsExchange. Commodity capacity. PE exports were above 2 bil- sive influence on the market. Domes-
supplies remained abundant and sell- lion pounds for the seventh straight tic processors were turned off by the
ers kept discounting to move mate- month, accounting for nearly 47% of steep cost-push price increase last
rial before the end of the year. By total PE sales. Domestic sales slipped month and slowed their purchases to
Dec. 15, many of the sharply priced to 97% of the trailing 12-month aver- only 96.5% of the trailing 12-month
railcars had sold, but some offers will age. When the dust settled, there was average. Total production outstripped
carry over into this week and be avail- a moderate 2.5% inventory build, the weak sales and, consequently, up-
able until they’re gone. Trading was bringing producers’ collective stocks stream inventories built for the sec-
well spread across all PE grades, with to the highest level since July, which ond straight month back to levels not
high-density PE Blow Mold and linear- helps to explain from where all of the seen since April. For complete supply-
low-density PE Film seeing the bulk of December PE deals are coming. demand data, readers are encouraged
completed business. With two weeks Strong demand for PP resin to subscribe to the ACC.
left before the end of the year, ad- Spot PP trading was active and turno-

66 PLASTICS NEWSASTICS NEWS January 2024
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