Page 50 - Plastics News September 2023

Resin Price Report: Supply Tightness Expected to Continue

rime polyethylene (PE) and poly- storm veered away from the petro- should grow over time.
Ppropylene (PP) prices held flat chemical producing part of the Gulf By design, this alternative demand for
the week of Aug. 28, but maintained Coast, where much of the nation's North American commodity resins
their upward bias. After a very strong resin production is situated. How- gives producers an excellent outlet for
start to August, demand tapered off ever, the threat remains for the next the massive capacity expansions seen
the second half of the month, reports couple of months. Producers have over the last seven years, according
the PlasticsExchange in its Market nominated September price increases to the PlasticsExchange. Aside from
Update. Availability also diminished, for both PE and PP contracts: They soaking up surplus material, Crude
as most producers sold out of their are logically in place during hurricane Oil costs, which just reached the high-
spot resin. Continued tightness is ex- season, but could find favor regardless est level since November 2022, have
pected through September, caused in of weather events as supply/demand also been raising the floor price for
part by unexpected outages as well as dynamics have been shifting pricing export resin as well as domestic resin.
upcoming planned turnarounds. power back to sellers. The flood of well-priced North Amer-
Relatively few fresh railcars were of- Rapidly rising prices for Crude Oil, at ican resin into higher cost regions has
fered last week, though some wide- the top of the supply chain for most pressured local producers to throttle
spec cars — mostly with undesirable international PE and PP resins, has back their operating rates to prevent
specs — remained. Resellers have further lifted ethylene and propylene oversupply from developing, notes
also reduced their prompt availability: prices in Asia, which are now ap- the PlasticsExchange. International
Expecting a better flow of material in proaching $0.40/lb. This upward cost resin trade flow is being affected by
August, some were caught short in pressure in regions outside of cost- other factors, too: major gridlock at
filling and shipping railcars in a timely advantaged North America, which the Panama Canal has caused huge
manner, leading to a bit of a run on derives most of its feedstock ethylene delays and the aforementioned high-
packaged truckloads to satisfy supply from natural gas liquid (NGL) streams, er feedstock costs have also brought
gaps, writes the PlasticsExchange. and with the advent of propane dehy- fewer Asian offers into Latin America,
Gulf Coast dodges a bullet drogenation (PDH) units, has enabled causing these markets to look to the
additional export sales at rising prices. north for competitive supplies.
The more active hurricane season
has been keeping market participants PE exports have now reached nearly Spot PE resin availability thins
on their toes, as Hurricane Idalia hit 50% of all producer sales, and PP ex- Domestic PE trading was reduced as
Florida. A bullet was dodged, as the ports, while only around 5%, have August came to a close.
also been on an upward trend that

50 PLASTICS NEWSASTICS NEWS September 2023
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