The resin markets were a tad slow to begin 2015, but activity improved as the week (Jan. 5-9) wore on; a flurry of offers then hit the market and prices resumed their descent, according to The Plastics Exchange. It is not breaking news that crude oil is in the midst of a cataclysmic collapse; prices continue to tumble and are currently moving downstream. Monomer markets have truly taken it on the chin and resin prices are lopping off chunks at a time; processors will receive contract price relief in January, the third month in a row. On average, North American resin prices remain higher than in most other regions, so spot exports are difficult - the much stronger dollar only adds to the complications. Still, super cheap deals were made in December, which seems to have enabled a good amount of offshore sales.
Energy prices continue to erode in epic fashion. The super steep and sharp slide has shown no signs of slowing. However, sooner or later the oil markets will find support simply because after falling more than 50% there is only so much further before zero is in sight - and of course, that is not a realistic price. WTI Crude Oil prices began the year with another 8% decline, the Feb futures contract dropped $4.33/bbl to end the week at $48.36/bbl. Feb Brent Oil has been falling faster, losing $6.31/bbl this week to $50.11/bbl. Natural gas futures were hit hard the latter half of December and eased another $.057/mmBtu this past week to settle at $2.946/mmBtu. Spot ethane recovered a bit to $.19/gal ($.08/lb). Spot propane remains relatively weak at just $.455/gal ($.128/lb).
Spot ethylene began the year with a splat! After a modest late December bounce, prices have returned to the cycle's lows. Values for January ethylene consistently slid until the market stood just below $.38/lb on Friday. It was a weekly loss of $.05/lb, about 12%. Less than four months ago, spot ethylene traded as high as $.765/lb, so the market break amounts to 50%. The forward curve currently indicates that ethylene will only get cheaper as the year progresses, discounts are provided each month of 2015 until December is priced around $.345/lb.