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  Past Reports
Weekly Market Update
Market Update
May 26, 2023


Spot resin trading remained heightened, but it was off the previous week's pace, as many market participants took early leave ahead of the long Memorial Day weekend. Domestic demand has shown marked improvement during May as prices moved lower, facilitating our spot market dealings. Railcar availability remained quite good for Polyethylene and Polypropylene and our prime resin prices peeled off another penny or two. Resellers in general have thinned their on-hand stocks; we have also lightened our market-making inventories which had peaked in December, and are now back to our lowest level since June 2022. However, we still maintain spot market liquidity with the full slate of commodity-grade resins packed and ready to go for prompt shipment. Export interest stayed solid, though weak global demand and competitive offers from Asia into Latin America and the Middle East and Russia into Europe has created challenges for incremental export sales from the US. Houston prices were softer as traders anticipate lower June offers intended to regain market leadership.

The Polyethylene market was slightly less active this week as traders began to wind down for the month. All PE grades dropped a couple of cents on the week and some buyers that had been holding out took advantage of these discounts with well-timed purchases. HDPE was the major mover across our marketplace with injection grades leading the charge, followed closely by blow molding materials. LDPE film business picked back up after a couple weeks of scant interest with some scattered LLDPE trades peppered in as well. Despite a nickel nomination, May PE contracts are expected to be flat at best, but will more likely lose $.03/lb, which would erase the unpopular $.03/lb increase garnered in March. If so, contracts will still be up $.03/lb for the year while most PE grades have given back their gains in the spot market. Regardless of the ultimate May settlement, producers will attempt a price increase in June, albeit a gentler $.03/lb push. Some product allocations remain in place, but overall supplies are more than adequate and Shell's new PE facility in Pennsylvania, which had gone offline, is expected to return in the near future.

After a month of robust buying, spot Polypropylene demand teetered off this past week, as processors had seemingly already satisfied most of their monthly requirements. Nonetheless, producers continued to offer a healthy flow of discounted railcars into the spot market and our buyers only picked away, resulting in another penny loss across CoPP and HoPP grades. Once again, there was more railcar business completed than truckloads and CoPP was more sought, holding on to its 6-cent spot premium to HoPP, which saw limited interest. After four months of upstream inventory builds, Polypropylene is considered well-supplied, and those processors that resisted high-volume purchases during the fierce first-quarter rally, have been rewarded with stellar buying opportunities during the second quarter. May PP contracts should finalize with an $.08/lb decrease in line with the PGP cost relief. The two-month April-May price break of $.19/lb leaves just 7 cents of cost-push increases intact from Q1 as we head into June.

Spot monomer interest remained high while prices ticked lower as average volumes changed hands. Ethylene began Monday with a tinge of pressure to set the week's weak tone. May Ethylene initially transacted 3 times at $.175/lb, and on Tuesday several more trades were concluded at $.1725/lb, while June Ethylene was dealt twice at $.175/lb. Transactions for Q4'23 and Q1'24 deliveries were also executed. May Ethylene was brokered midweek at $.16875/lb and a deal for 2H '23 deliveries was agreed at $.18/lb. On Thursday traders swapped prompt Ethylene between Texas and Louisiana, a two-cent premium was noted for TX material. On Friday May Ethylene in TX sold at $.1675/lb before the market came to rest. May Ethylene ended the week at $.1675/lb down about $.0075/lb, reversing the prior week's gain. The back-month contracts saw lighter losses and the forward curve contango widened slightly.

Polymer Grade Propylene activity lagged a bit, but traders still completed a number of visible dealings, mostly midweek. PGP for 4Q delivery was the first to transact Monday at $.37/lb. On Wednesday spot May PGP swapped ownership twice at $.35/lb, which was down more than a half-cent, a June sale was also inked at $.35/lb, July PGP exchanged hands three times at $.345/lb, a deal for Jun-July deliveries was finalized at $.345/lb, and 3Q PGP was dealt at $.35/lb. On Friday 4Q PGP deliveries concluded at $.35/lb, which was down 2 cents from the week's opening trade. May PGP's weighted spot average settled the week at $.352/lb. Deferred contracts saw heavier losses as much as $.02/lb, the forward curve narrowed but remained in contango. May PGP contracts settled this week at $.39/lb, down $.08/lb from April and in line with our expectations. It's been a volatile year for Propylene, which was plagued by winter PDH outages; PGP contracts rose $.26/lb during the first quarter and have given back $.19/lb of those gains so far during the second quarter. Spot and contract prices are currently well aligned price-wise, the best that they have been into a month's end during 2023.

The Energy Complex was mixed as the Crude Oil market finished higher this week on concerns that OPEC+ may cut production just before the start of the summer driving season. Nat Gas went in the opposite direction and lost more than 15%, driven by a combination of weak demand and high inventories. July WTI made its weekly low of $70.67/bbl on Monday before rising $4.06/bbl to a high of $74.73/bbl on Wednesday. By Friday's close, July WTI ended at $72.67/bbl for a net gain of $.70/bbl. Brent Oil took its similar path with WTI and hit its low on Monday at $74.55/bbl before rising just over $4/bbl to its midweek high of $78.66/bbl. July Brent Friday finished at $76.95/bbl, up a net $1.37/bbl. Natural Gas trading was very different. The June futures contract made its high of $2.569/mmBtu on Monday and then trended lower through Friday, falling nearly 43 cents to bottom out at $2.143/mmBtu, before bouncing back a few cents to end the week at $2.181/mmBtu, down more than 40 cents. NGLs were modestly lower; Ethane slid a quarter-cent to $.204/gal ($.086/lb) while Propane eased fractionally to $.654/gal ($.185/lb).

Total Offers 14,886,344 lbs Spot Contract
ResinTotal lbsLowHighBidOffer
PP Homo2,156,324$.460$.600$.480$.550
PP Copo2,066,048$.500$.650$.540$.610
LDPE - Film2,028,232$.500$.580$.500$.550
HDPE - Inj1,895,956$.500$.580$.500$.550
HDPE - Blow Mold1,631,404$.500$.580$.500$.550
LLDPE - Inj1,512,760$.530$.620$.530$.580
LLDPE - Film1,497,036$.500$.570$.490$.540
HMWPE - Film1,350,024$.490$.560$.500$.550
LDPE - Inj748,560$.530$.630$.570$.620
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