The resin markets were active this past week, as October ended and buyers faced a fresh round of price increases. The dizzying highs in energy and monomer markets also faced the possibility of muting demand in these final eight weeks of the year.
In the beginning of the week, fresh Polyethylene cars were available from producers and there was also an aggressive push by traders to find homes for unsold Polyethylene railcars that they had committed to purchase earlier in the month. During the same time, processors were seeking to procure additional spot Polypropylene railcars to build a larger inventory buffer as a hedge against imminent price increase for November contracts.
Soaring energy and feedstock costs have compelled resin producers to nominate their steepest price increases of the year. Polyethylene producers seek to raise contract prices by as much as $.11/lb with Nov 1 and 15th implementation dates. Polypropylene produces have revised November price increase nominations, some twice, to now average $.08/lb.
Crude Oil prices continue to break all time records, with December futures again adding more than $4/bbl this past week to close at $95.93/bbl Friday. Natural Gas prices also ran higher this week, increasing $.61/mmBtu, to an $8.416/mmBtu settlement on Friday.
Ethylene supplies, which were already tight, were further restricted during September and October, due to a series of planned an unplanned cracker outages. This helped propel monomer prices on a long rally that lifted prices to levels as high as $.54/lb in mid-Oct. Now that many of the outages have been resolved, returning more capacity on-stream, the Ethylene market has come under pressure and spot prices have peeled back under $.50/lb. Still, while spot prices were peaking, October monomer contracts settled $.05/lb higher, with a steep and unrealistic $.10/lb increase also nominated for November Ethylene contracts.
RGP prices, also supported by cracker and refinery outages, have stayed strong, maintaining record levels around $.56-$.565/lb for weeks. We are just starting to see signs that the drawn out rally might be coming to an end. While still trading at $.55875 and $.56, there have been indications that ExxonMobil would soon restart its downed FCC in Beaumont, TX, which has contributed to the expectation of increased supply in the near-term.
Commodity resin prices have been pushed higher by rising feedstock costs. With what appears to be ample resin inventories in the supply chain and currently limited profitable export opportunities, the domestic market will likely take full lead from the monomer markets. With sharp increases again in play for both November monomer and resin contracts, spot monomer trading activity over the next 1-2 weeks will very likely foretell the story.
In the beginning of the week, fresh Polyethylene cars were available from producers and there was also an aggressive push by traders to find homes for unsold Polyethylene railcars that they had committed to purchase earlier in the month. During the same time, processors were seeking to procure additional spot Polypropylene railcars to build a larger inventory buffer as a hedge against imminent price increase for November contracts.
Soaring energy and feedstock costs have compelled resin producers to nominate their steepest price increases of the year. Polyethylene producers seek to raise contract prices by as much as $.11/lb with Nov 1 and 15th implementation dates. Polypropylene produces have revised November price increase nominations, some twice, to now average $.08/lb.
Crude Oil prices continue to break all time records, with December futures again adding more than $4/bbl this past week to close at $95.93/bbl Friday. Natural Gas prices also ran higher this week, increasing $.61/mmBtu, to an $8.416/mmBtu settlement on Friday.
Ethylene supplies, which were already tight, were further restricted during September and October, due to a series of planned an unplanned cracker outages. This helped propel monomer prices on a long rally that lifted prices to levels as high as $.54/lb in mid-Oct. Now that many of the outages have been resolved, returning more capacity on-stream, the Ethylene market has come under pressure and spot prices have peeled back under $.50/lb. Still, while spot prices were peaking, October monomer contracts settled $.05/lb higher, with a steep and unrealistic $.10/lb increase also nominated for November Ethylene contracts.
RGP prices, also supported by cracker and refinery outages, have stayed strong, maintaining record levels around $.56-$.565/lb for weeks. We are just starting to see signs that the drawn out rally might be coming to an end. While still trading at $.55875 and $.56, there have been indications that ExxonMobil would soon restart its downed FCC in Beaumont, TX, which has contributed to the expectation of increased supply in the near-term.
Commodity resin prices have been pushed higher by rising feedstock costs. With what appears to be ample resin inventories in the supply chain and currently limited profitable export opportunities, the domestic market will likely take full lead from the monomer markets. With sharp increases again in play for both November monomer and resin contracts, spot monomer trading activity over the next 1-2 weeks will very likely foretell the story.
