Sharply lower feedstock costs have worked their way downstream, pushing resin buyers to the sidelines while they watch prices fall, as the fourth quarter resin market started under severe pressure. Spot polyethylene (PE) prices shed another $0.01-0.02/lb, while polypropylene (PP) prices crashed $0.07/lb, with still more erosion seemingly to come.
Spot-trading platform The Plastics Exchange (TPE) noted that the lack of spot demand boosted inventories at the same time suppliers have undertaken a "price-purging effort". TPE CEO Michael Greenberg said that even with these lower prices, the spot export markets remain very challenging. Integrated PE producers that maintain favorable feedstock positions, however, are still capable of exporting a significant amount of material "at will", according to Greenberg. October contracts for both commodity resin groups will be lower, with PP down more than PE.