Average resin prices were steady last week with limited producer offerings at relatively high prices were offset by abundant trader supplies priced to sell. Spot resin trading activity was strong, according to The Plastics Exchange (TPE), but completed transactions were off overall amid waning processor demand. Fresh generic prime polyethylene (PE) railcars were still mostly offered up $0.05/lb for the month, reflecting producers' recurring efforts to implement a price increase. Although November polypropylene (PP) contracts will drop $0.04-$0.06/lb, spot prices have bounced from October lows. Resin exports are picking up as producers sell select materials at discounted prices to enable such transactions.
Energy prices moved in sharply opposite directions, with December crude oil futures advanced further, closing in on the $100/bbl level, after the market ended the week with a $4.74/bbl gain to settle at a new 3-month high of $98.99/bbl. December natural gas futures continued to unwind, sliding another $0.199/mmBtu to end the week at $3.584/mmBtu, just above the 12-month low. The crude oil: natural gas price ratio has exploded to 27.6:1, amongst the widest on record. This provides fully integrated North American polyethylene (PE) producers who derive the majority of their feedstocks from natural gas with a significant cost advantage over their international counterparts that largely source feedstocks from crude.