Resin prices are levelling off after some summer hikes. Summer usually brings resin price hikes of variable magnitudes. This summer was not an exception. Some of the usual factors applied, such as higher feedstock prices caused by higher fuel prices, and higher demand for feedstock for PET. Unique factor of this summer hike was the demand hike for PE caused by increased level of North American Chine export demand. Also there were some planned and unplanned outages at refineries.

“Polyethylene prices held steady through August and were expected to remain so through September. Announced 4¢/lb increases for September were unlikely to be implemented. Still, a new 5¢ hike was posted for Oct. 1. The London Metal Exchange (LME) North American short-term futures contract in blown-film butene LLDPE for October was 47.4¢/lb, up from September’s 45.5¢”

The increase in the demand level of North American Chine PE export has eased and softened since July and PE production capacities have stabilized across North America since the summer outages. Currently the Ethylene spot prices seem to be stabilizing around 28¢ to 29¢/lb, due to downward pressure. The reason why further and significant price drops are not projected is that the North American PE inventories are at a historic low level of under 30 days.
Other resin prices are impacted by similar downward pressures. With the exception of PP prices, whereas inventories are even lower than for the other resins, prices are levelling off.

I am happy to see the moderating price levels of resins. It is a relief for both our film products and for our plastic processing equipment customers that the resin prices are moving with the reality of the industry. This makes it possible that we maintain a reasonable price level for our film products customers and also it helps our plastic processing equipment customers to create good business plans for investing in capital equipment.

Excerpt is from the Plastics Technology Magazine.