Polyethylene prices stay stable in September | Plastics News

Oct 24, 2024

ExxonMobil's Baton Rouge site

Commodity resin pricing activity slowed down in September, with the only movement coming from price drops for polypropylene and PET bottle resin.

Lower feedstock costs and drops in demand led to lower North American prices for both those materials. Average selling prices for PP were down an average of 4 cents, while PET bottle resin prices dipped an average of 3 cents, according to market sources contacted by Plastics News.

The September PP drop followed a similar drop in price for polymer-grade propylene (PGP) monomer feedstock. PP prices had been up 2 cents in August, marking the third consecutive price hike for that material. Those three moves covered the summer months and totaled 9 cents per pound.

In a recent market report, PP supplier Blue Clover of New York said that a continued drop for PGP "makes sense for several reasons."

"From a correlated energy market perspective, PGP did not drop in price as much as crude and propane did the first two weeks of September, so PGP has been playing catch-up," Blue Clover added. "From a fundamental perspective, all PDH units (making PGP) have been running this month and hurricanes have so far managed to avoid the PGP production areas, so PGP supply has been increasing."

August was a strong month for PP production, sources said. Operating rates, which had been around 78 percent for much of the year, increased to 85 percent. That improvement helped make August the strongest PP production month since the first half of 2021.

Hurricane Francine, which hit Louisiana on Sept. 11, caused brief shutdowns at PP units operated by ExxonMobil Chemical in Baton Rouge and by Pinnacle Polymers in Garyville, but it didn't have much of an impact on the overall market, sources said.

Combined with previous increases and decreases, PP prices now are up a net of 3 cents so far in 2024.

PET bottle resin prices fell 3 cents in September after declining 2 cents in August. Prior to these declines, prices for the materials had been up 1 cent in both June and July. The September price drop followed lower prices for raw materials, including paraxylene and purified terephthalic acid, according to an industry source contacted by PN.

Combined with previous increases and decreases, PET prices now are down a net of 4 cents so far in 2024. PET demand in North America has been in decline since August. Seasonal demand for bottled water and carbonated soft drinks often influence North American PET prices. Demand from those markets typically declines when weather cools in most of the region later in the year.

Prices for polyethylene, PVC and polystyrene resins all were flat in September. For PE, that marked the second straight month of flat prices after climbing 5 cents in July. Supply concerns over brief outages caused by Hurricane Beryl played a role in the July price hikes.

Additional 5-cent increases that were on the table for August and September were unsuccessful. Another 5-cent move has been announced for October, but in a recent research note, market analyst Mike Burns said, "Without any disruptions, the October increase should be difficult to implement."

Prior to the July increase, regional PE prices had been flat in May and June. Based on previous price moves, regional PE prices are up an average of 13 cents per pound so far in 2024.

North American PE demand is up 3-6 percent so far in 2024, sources said. Exports of PE resin from the U.S. and Canada reached an all-time high of 45 percent of total production in 2023. The export rate was at that same level in the first nine months of 2024. By comparison, exports accounted for 23-28 percent of North American PE production in 2015-18 and 33-39 percent of that amount in 2019-22.

PVC prices were flat in September after declining an average of 2 cents per pound in August. Prices for that material had increased by 1 cent in both June and July. The August price drop was tied into lower construction activity in the region.

U.S. housing starts declined in September, coming in at an annual rate of 1.43 million, according to the U.S. Census Bureau. That number was down almost 3 percent vs. August, and down more than 5 percent vs. the same month in 2023.

Construction activity accounts for about 60 percent of North American PVC demand. Regional PVC prices are up a net of 6 cents so far in 2024.

Polystyrene prices were flat for the second straight month in September after declining 1 cent in July. Prices for that material now have been flat five times in the last six months.

Prices for benzene — a feedstock used to make styrene monomer — dropped a total of 38 cents from July to September to reach $3.61 per gallon, a decline of almost 10 percent, but those moves have yet to affect PS pricing.

In feedstocks, regional prices for crude oil declined in September, while prices for natural gas moved up. West Texas Intermediate oil prices opened the month at $73.55 but dropped more than 7 percent to $68.20 by the end of the month. They've increased somewhat from that point, up almost 4 percent to $70.85 in early trading Oct. 23.

Markets for natural gas — used as a feedstock to make PE and PVC — started September at $2.13 per million British thermal units but soared 37 percent to $2.92 by the end of the month. From that point, however, prices have tumbled 21 percent to close at $2.31 on Oct. 22.

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