Resin pricing report: Sellers spur competitive week

05/19/2014

The spot resin markets remained busy and an above average volume of transactions was completed through The Plastics Exchange's trading desk. Order flow was very good; suppliers were more aggressive than buyers and often conceded on price to close the deal. Most generic prime polyethylene grades shed a half-penny, except for LDPE film which held firm. Gen prime polypropylene slid a cent and some offgrade transacted at deeper discounts. PE producers already pushed off their May price increase effort, paving the way for processors to strongly seek a decrease. PGP monomer and PP resin contracts have begun to settle down just $.005/lb, which could be considered light.

Both major US energy markets reversed course and again ended in opposite directions. Crude oil traded on both sides of $100/bbl, but still in a tight $2.27/bbl range. The June futures contract ended the week at $99.99/bbl, it was a slight $.23/bbl gain. June natural gas futures first rallied, reaching $4.827/mmBtu midweek, but then fell fairly sharply to settle at $4.531/mmBtu, a net loss of $.127/mmBtu. The crude oil: natural gas ratio sits at 22:1.

Spot ethane prices eased a quarter-cent to $.2875/gal ($.121/lb). Spot propane eroded another $.03/gal to end the week at $1.04/gal ($.295/lb).

Spot ethylene activity was about average again, perhaps even a bit slow for the prompt months and certainly well off the fervent pace seen in April. Ethylene for May delivery peeled off a few pennies, first trading down a cent at $.565/lb, then $.555/lb and again a $.545/lb - a total loss of $.03/lb. The forward markets were busier, with a few deals done out through the end of 2015. The market is backwardated with Dec 2014 priced around $.525/lb and Dec 2015 under $.47/lb. After an extended outage, some ethylene is starting to flow from Texas to Louisiana though CP's Evangeline pipeline. At least five petrochemical plants still have crackers offline for maintenance, but there is some light starting to emerge at the end of this season's turnaround tunnel.
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