The spot resin markets remained very busy and transacted volumes ran well above average for the third week in a row, according to The Plastics Exchange. There was a good flow of fresh railcar offerings, and although resellers, both national and Houston-based, are still providing significant spot liquidity. Their new purchases so far in April have generally been against customer orders, and their burdensome old inventories are being chipped away by processors. Most polyethylene grades shed a half-cent and polypropylene held steady. Polyethylene producers by and large have already forgone their $.06/lb increase effort in April, while market chatter in the processor community is growing louder as the call for a $.02/lb decrease is spreading. Despite an early nomination for a rollover, PGP contracts have seen an initial agreement to ease $.01/lb in April, but it has not been finalized.
Both major US energy products moved markedly higher. Crude oil markets felt early pressure and briefly dipped below the $100/bbl level, but then rallied from there. The May futures contract ended the week at $103.74/bbl, it was a solid $2.60/bbl gain. May natural gas futures had four straight winning days, then pulled back a bit on Friday
to $4.62/mmBtu, it was still a hefty net $.181/mmBtu gain. The crude oil: natural gas ratio came in a little to 22.5:1. Ethane prices added a penny to $.2975/gal ($.125/lb). Propane prices were up $.03/gal to $1.11/gal (.315/ lb).
The ethylene market was extremely active; a high volume of material changed hands through at least 40 spot transactions and all at higher levels. Late week gains finally pushed spot prices out of their 10-week 2-cent range as ethylene for April delivery ultimately ended the week at $.5375/lb, up $.025lb. While all months of 2014 were marked higher, a number of spread and strip deals gave the forward curve a little shape shift. The front end has taken on a slight contango as we enter the heaviest of this season's planned turnarounds. ExxonMobil, Equistar and Williams currently have crackers offline, with a few more to come. However, after the next couple months the discounts kick when all crackers, some with expanded capacity, are expected to be back onstream.