The US commodity resin markets were fairly quiet during the trading week which was shortened due to the Thanksgiving holiday - I hope it was happy and peaceful for all. The slow market was not much of a surprise, given the minimal spot supply and demand that has been shown to the market so far during November.
Contrary to November business, a very high volume of spot activity occured during October. During this time, producers liquidated and processors stockpiled large amounts of resin. Both sides strategically prepared to withstand short-term market pressures during November, which is marked with the steepest price increase nominations for 2007.
Both Polyethylene and Polypropylene producers, pressured by high and rising energy and contract monomer contracts, have felt the need to pass their higher costs downstream in the form of increased resin contract pricing. A total of $.11/lb of Polyethylene increases and on average $.08/lb of Polypropylene increases were nominated for November resin contracts.
Crude Oil prices continue to reach towards the mythical $100/bbl threshold, with the the front month contract moving to January and adding $4.34/bbl this week, to settle at $98.18/bbl. December Natural Gas futures, which will expire on November 28, closed the week at $7.70/mmBtu, down $.30/mmBtu.
Spot Ethylene prices snapped back higher, with all trades last week done in the lower $.50s/lb and as high as $.525/lb. This is about $.03/lb higher than the swing lows seen during the previous week. Spot RGP prices were mostly steady with few recent trades; the market however, is perhaps a couple cents lower than the record highs of $.565/lb reached near the end of October.
The value of the US dollar continued to deteriorate, nearly touching $1.50/Euro, before recovering to settle at a weekly record low of $1.4838. While commodity resin export demand has recently been slower, mostly do to seasonality, the weaker dollar will help bring new orders. Producer export offers, while relaxed some, remain higher during November, which has made transactions though the secondary market a challenge.
Polyethylene contracts have indeed been invoiced $.05/lb during November, although large buyers have not all fully accepted the increase. Polyethylene producers have added yet another $.05/lb increase slated for Mid-Dec, which will at least serve to support the $.06/lb increase that seems to have been pushed back from Nov 15 to Dec 1. November Polypropylene contracts appear to be settling $.06-.07/lb higher, capturing most of the $.0725/lb Nov contract monomer increase.
Contrary to November business, a very high volume of spot activity occured during October. During this time, producers liquidated and processors stockpiled large amounts of resin. Both sides strategically prepared to withstand short-term market pressures during November, which is marked with the steepest price increase nominations for 2007.
Both Polyethylene and Polypropylene producers, pressured by high and rising energy and contract monomer contracts, have felt the need to pass their higher costs downstream in the form of increased resin contract pricing. A total of $.11/lb of Polyethylene increases and on average $.08/lb of Polypropylene increases were nominated for November resin contracts.
Crude Oil prices continue to reach towards the mythical $100/bbl threshold, with the the front month contract moving to January and adding $4.34/bbl this week, to settle at $98.18/bbl. December Natural Gas futures, which will expire on November 28, closed the week at $7.70/mmBtu, down $.30/mmBtu.
Spot Ethylene prices snapped back higher, with all trades last week done in the lower $.50s/lb and as high as $.525/lb. This is about $.03/lb higher than the swing lows seen during the previous week. Spot RGP prices were mostly steady with few recent trades; the market however, is perhaps a couple cents lower than the record highs of $.565/lb reached near the end of October.
The value of the US dollar continued to deteriorate, nearly touching $1.50/Euro, before recovering to settle at a weekly record low of $1.4838. While commodity resin export demand has recently been slower, mostly do to seasonality, the weaker dollar will help bring new orders. Producer export offers, while relaxed some, remain higher during November, which has made transactions though the secondary market a challenge.
Polyethylene contracts have indeed been invoiced $.05/lb during November, although large buyers have not all fully accepted the increase. Polyethylene producers have added yet another $.05/lb increase slated for Mid-Dec, which will at least serve to support the $.06/lb increase that seems to have been pushed back from Nov 15 to Dec 1. November Polypropylene contracts appear to be settling $.06-.07/lb higher, capturing most of the $.0725/lb Nov contract monomer increase.
