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  Past Reports
Weekly Market Update
ThePlasticsExchange.com
Market Update
September 13, 2019

Summary

Spot resin trading was a bit slower this week, inquiries were reduced, fresh offers diminished and negotiations were more challenging. Resin prices were mixed with the negative bias maintained. The Polyethylene trend has been bearish and processors seem to assume that prices will simply move lower week after week, but sometimes the low-ball bids get ahead of themselves and sellers back away from participation. We saw several occasions of this activity this week, which seemed particularly out of place for LDPE, which remains tight and actually moved higher again. Polypropylene activity grabbed the spotlight this week as lower monomer costs encouraged more aggressive selling, both price and volume, while processors, some of whom are in the midst of their peak demand period, were happy to enjoy some added savings. PE producers are taking another stab at a $.03-.04/lb price increase this month; PP contracts will basically follow monomer, which at the moment is looking fairly steady. Exports are robust and incremental orders are available if sellers wish to chase ever-falling international bids.

The major energy markets were mixed this past week with Crude Oil declining while Nat Gas continued to rise. WTI Crude Oil continued to stay range bound last week, losing $1.67/bbl to $54.85/bbl and Brent outperformed WTI by only losing $1.32/bbl to finish Friday at $60.22/bbl. The real action, however, occurred Friday night after markets had closed as Saudi oil infrastructure was attacked, preliminary reports indicate it could take several weeks to restore production on a significant amount of oil supply; it’s currently unclear the magnitude of the oil spike that could happen, how long it would last and the effect it could have on the domestic and international resin markets. Nat Gas continued its recent rally gaining $.118/mmBtu to $2.614/mmBtu. The market had reached into this range in previous months only to sell-off, time will tell if this rally will reverse the prevailing downtrend that has been evident in the markets for most of the year. Ethane was essentially steady at $.215/gal ($.09/lb). Propane lost $.015/gal to $.43/gal ($.121/lb).

Monomer trading was fairly active, there was good interest and moderate completed volume while prices were mixed. Ethylene found early support on Monday and prices jumped as spot September changed hands at $.22/lb, up $.0225/lb. Tuesday saw the prompt market pull back a bit and traders turned their attention to the deferred months. Ethylene made another push higher on Friday and by late afternoon spot Sept had added a total of $.0325/lb to its price, settling at $.23/lb. This was a massive weekly gain of 16.5%. Propylene slowly worked its way lower throughout the week and completed deals were done in both prompt and the forward months. On Tuesday, numerous deals for Sept PGP occurred at $.3575/lb, but like Ethylene, attention quickly shifted to the forward months where the majority of the week’s transactions took place. By Friday, spot PGP had sunk nearly a penny, as September settled at $.3575/lb. Although Propylene entered Sept with strength, it has since weakened and given current spot levels, Sept PGP contracts might now be priced flat to perhaps a half-cent lower, though there is plenty of time for the market to still move before contract negotiations conclude.

The spot Polyethylene market was somewhat uninspired this past week and general activity levels were below the active pace that we have seen throughout much of the summer. Completed volumes slipped below average as many participants sat on the sidelines, yielding a lack of fresh inquiries and interesting offers. Our completed transactions were skewed towards Prime rather than Offgrade, with a concentration on film grades. Our spot prices continued to move around with continued pressure on HDPE grades, while LDPE for film added another $.005/lb as a result of notably tight supplies, particularly for material ready for immediate shipment. Despite ongoing price increase attempts and generally opaque pricing, most PE contracts seem to have decreased $.06/lb over the past few months. Even with rumblings of an economic slowdown and all the new resin production, PE producers remain prepared to increase prices by as much as $.07/lb if the right situation presents. This could stem from a severe weather situation, trade war resolution, Middle East military conflict or any other significant supply chain disruption. With most Polyethylene prices now at decade-long lows, we feel that current price levels are very favorable to processors and worthy of an added inventory buffer given potential upside risk.

Polypropylene trading returned to its rampant pace and completed volumes were high, again tallying above the typical weekly average that we have seen over the past year or two; this heightened level is starting to become the new norm. HoPP and CoPP resins each lost a penny as they followed PGP costs lower. We were offered ample supply of both HoPP and CoPP in packaged TLs, fresh RCs to ship as well as bulk loads staged and ready for shipment. Worth noting, our trading desk was offered material by more traders than normal, perhaps a sign of some worry as the PGP forward curve continued to flatten. The market was starting to feel neutral/bullish, especially with some planned turnarounds / maintenance ahead, but it now seems to have lost a little steam and sellers are more open to moving material vs holding out for the anticipated higher sale.

Total Offers 16,131,068 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
PP Copo3,199,748$.460$.570$.500$.540
HDPE - Blow Mold2,767,220$.400$.485$.380$.420
LDPE - Film2,170,944$.450$.535$.450$.490
PP Homo2,126,024$.480$.550$.480$.520
HDPE - Inj1,897,772$.395$.465$.380$.420
LLDPE - Film1,406,760$.385$.480$.375$.415
LLDPE - Inj1,376,300$.465$.535$.450$.490
HMWPE - Film661,380$.410$.450$.380$.420
LDPE - Inj524,920$.450$.540$.450$.490
 
 
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