Coming off the only slow week of the month, spot resin activity surged to end May with a bang, according to a report from The Plastics Exchange. For the last week of May, better spot availability for certain previously scarce resins, such as LDPE, aided the higher transaction volumes. Spot polypropylene prices shed a half-cent as did most polyethylene grades, sans still snug LLDPE, which again held firm. Producers skated through another month without relieving PE contract prices - there has not been an official decrease since Nov 2012, when $.02/lb came out of the market. PP contracts eased only $.005/lb, returning to levels last seen in Dec 2013. PP exports have been relatively insignificant and incremental PE exports through secondary channels remain challenged. Notwithstanding sporadic production issues, signs of growing upstream resin inventories are beginning to show.
The major US energy markets finally reversed course, but still traded in opposite directions. After a several-week rally, Crude Oil finally gave back a bit of its gains; the July contract peeled off $1.64/bbl to settle Friday at $102.71/ bbl. July Natural Gas futures recovered a solid $.137/mmBtu and rallied to $4.542/mmBtu by week's end. For the second week in a row spot Ethane added a half-cent, closing Friday at $.2925/gal ($.123/lb). After serious volatility, spot Propane prices stabilized somewhat, shedding just $.005/gal to $1.045/gal ($.296/lb). The Crude Oil: Natural Gas ratio contracted to 22.6:1.
Spot ethylene activity picked up and saw slight gains as the month came to a close. A handful of crackers remain offline for their scheduled turnarounds. Ethylene for both May and June delivery transacted quite a number of times and all within a penny range, most recently at $.545/lb, which was the high for the week. The forward curve steepened a bit with a $.02/lb discount afforded by Dec 2014, while ethylene is priced to slide another $.035/lb during the course of calendar year 2015.
Michael Greenberg, CEO of The Plastics Exchange, said that they were pleased to see spot polyethylene trading pick back up into month-end; despite the holiday shortened week, transacted volumes again ran above average. Most polyethylene materials slid $.005/lb and all HDPE grades reverted back to end of April levels, but are still up $.01/lb for 2014. Pent up demand for LDPE film resins, which had been tightly supplied, was met by willing sellers. Additional material remained on offer, which helped to knock LDPE prices off a half-cent, but are still up $.02/lb for the month and year. LLDPE continues to be the strongest of the bunch, holding firm to its $.04/lb gain for the year - it is the only grade whose spot gain equals the $.04/lb contract increase implemented in February.