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  Past Reports
Weekly Market Update
ThePlasticsExchange.com
Market Update
April 12, 2024

Summary

Spot resin trading stayed active into mid-month; the completed volumes across our marketplace were again above average and aided by strong export sales. While our Prime Polyethylene and Polypropylene prices have been giving back prior 2024 gains in recent weeks, they managed flat this week and still remain somewhat higher for the year. Domestic buyers continued to take advantage of the softer prices that have worked their way into the market; some processors have reported very healthy throughput and good downstream demand, while others claimed to generally still be slow. We started to see a heavier flow of Offgrade railcars, particularly PP, while some resellers offered light volumes of their forecasted Prime PE commitments into the market. Polyethylene contracts were up $.03/lb in January and while additional increases have been on the table ever since, none have stuck though producers are giving their current $.03/lb nomination another shot in April. Polypropylene contracts endured a dime of cost-push increases during the first quarter, and now that the monomer rally has fully retraced back to late Nov levels, are poised to give it all back and then some in April. Our first look at March American Chemistry Council data showed an increase in production and upstream inventories for both PE and PP with details below.

The Polyethylene market remained active, strong demand was met with better supplies and heavy dealings were done across all commodity PE grades. HDPE for blow mold and LDPE for film were the major movers during the week, though LLDPE for film and rotomolding also had a strong showing. Export demand was robust and in a rare occurrence, our offshore sales surpassed our domestic sales this week. Prime PE spot levels held steady after falling a penny across the board a week prior. Preliminary supply / demand data released by the ACC for March showed that Polyethylene producers ran their reactors hard, generating a record amount of PE resin for a single month. Domestic sales were quite high and ran almost 8% above the trailing 12-month average, and while exports were a tad softer, they were still 7% above the trailing 12-month average and comprised more than 45% of total PE sales. When the dust settled, production outstripped sales and there was a modest upstream inventory build of less than 1%, but still entered April at the highest level since December.

Polypropylene trading had a good showing with an even mix of business divvied between HoPP and CoPP resins. Our Prime PP pricing finally held flat after four consecutive weekly 2-cent drops which had peeled off $.08/lb since peaking in early March. There was still a bearish undertone as the market awaits a significant price decrease for April, which should break into double digits. Still, after an initial purge of reseller inventory in late March / early April, spot PP supplies have been noticeably tight, and packaged truckloads ready to ship now carry a significant premium to fresh railcars. High flow CoPP remains outright difficult to find, both truckloads and railcars, but we are seeing signs of supplies coming loose and based on March ACC data, there is plenty of material being held upstream. PP producers ran their reactors fairly hard in March, above 82%, making the most resin since August, and 6% above the trailing 12-month average. Domestic sales were fine at 1.4% below the 12-month average, while exports slowed significantly and were just 3.3% of total PP sales. Aside for Mexico, international buyers had little interest in US resin as exports tallied the lowest since Sept 2022. In the end, it was the overproduction that had the most impact, as producers collective PP inventories grew by more than 160 million pounds, an 8.6% rise over Feb ending levels. For precise data, we encourage you to subscribe directly to the American Chemistry Council.

Participation ramped back up in the monomer markets, deal flow was consistent amid average volumes, and prices were flat to higher. Ethylene began the week about steady when a transaction for prompt delivery was completed at $.1925/lb, 4Q ‘24 Ethylene was also inked twice at $.205/lb. Prices inched higher on Tuesday and a couple of completions were noted, April exchanged hands at $.195/lb and 4Q’24 deliveries were again done at $.205/lb. On Wednesday, traders flipped July Ethylene delivery locations between Louisiana and Texas, noting a quarter-cent premium for LA material. A deal for 4Q ‘24 deliveries was also noted in TX at $.2075/lb. Prices continued to move north on Thursday, April Ethylene swapped hands twice at $.1975/lb and then twice more at $.19625/lb. A few bids and offers remained through Friday but no further completions were seen. Spot April Ethylene moved up nearly a half-cent during the week to rest at $.19625/lb Friday afternoon. The back months saw slightly smaller gains and the forward contango narrowed slightly.

Propylene finally found its footing after weeks of erosion, there was some mild strength early on and numerous deals to start the week. Buyers and sellers came together on Monday afternoon, and five separate deals for April PGP were done at $.4275/lb, up a half-cent from Friday. Spot pricing pushed fractionally higher again on Tuesday when April PGP transacted at $.43/lb and two deals for May PGP were inked at $.43/lb. The recovery rally then stalled midweek and on Thursday, April PGP switched ownership at $.43/lb and a couple deals for 4Q PGP deliveries were brokered at $.435/lb. On Friday, prices chipped off about a penny and multiple transactions were recorded, spot April was finalized twice at $.41875/lb, May twice at $.42/lb and thrice at $.415/lb, June PGP was bartered three times at $.42/lb, and May-Sep PGP deliveries were agreed upon at $.43/lb. By Friday afternoon the weighted average of spot April PGP rested right around $.4215/lb, flat on the week. Deferred months saw fluctuating movements and the previously backwardated curve moved into a normalized contango starting with May and running through March ’25. Based on spot dealings so far in April, we expect to see a hefty contract decrease, somewhere in the realm of $.10 -.13/lb, which would pin a settlement for April PGP around $.45-.48/lb, but there is plenty of time for more movement prior to negotiations.

The major energy markets ended lower this week amid less-volatile trading. Crude Oil prices pressed into new high territory for this leg of the cycle, fueled by ongoing geopolitical tensions, but could not hold its gains and slid back into negative territory on signs of softer global demand. The May WTI contracts made its low of $84.55/bbl midweek and rallied as high as $87.67/bbl on Friday, and went into the weekend at $85.66/bbl, a net loss of $1.25/bbl. June Brent Oil moved within a $3.38/bbl range, going from a Monday low of $88.80/bbl to a Friday high of $92.18/bbl before finishing Friday at $90.45/bbl, up 72 cents on the week. Nat Gas eased as well amid weaker sentiment and warmer weather conditions. The May futures contract Gas established its high of $1.943/mmBtu midweek before easing through Friday. At the close, Nat Gas prices rested at $1.77/mmBtu, for a small weekly net loss of 1.5 cents. NGLs were mixed with Ethane up fractionally to $.193/gal ($.081/lb) and Propane down about $.035/gal to $.819/gal ($.231/lb).

Total Offers 16,176,635 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
PP Homo3,152,232$.510$.680$.590$.640
HDPE - Inj2,825,785$.460$.570$.500$.550
HDPE - Blow Mold2,425,786$.485$.580$.510$.560
LLDPE - Film1,814,024$.490$.585$.500$.550
PP Copo1,742,668$.550$.730$.640$.690
LDPE - Film1,540,024$.500$.585$.510$.560
LLDPE - Inj1,409,012$.510$.610$.540$.590
LDPE - Inj680,276$.550$.640$.560$.610
HMWPE - Film586,828$.495$.575$.510$.560
 
 
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