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PP Resin Prices Take Big Drop In March As PS, PVC Rise
Yangzhou Chengsen Plastics Co.,Ltd | Updated: Mar 30, 2018



North American selling prices for polypropylene resin took another big dive in March, as regional prices for solid polystyrene and PVC ticked up once again.

PP prices declined by an average of 6 cents per pound in March. Prices had fallen by a similar amount in February after jumping up 9 cents in January. Some 21 cents of combined price movement in three months is a lot for a commodity material, even one as volatile as PP.

The 6-cent March drop matched a similar price decline for polymer-grade propylene (PGP) feedstock. Supplies of both PP resin and propylene monomer have improved after a winter cold snap affected production in the Houston area. That cold snap led to the 9-cent January Jump.

Scott Newell, a PP market analyst with Resin Technology Inc. in Fort Worth, Texas, thinks the 6 cent March price drop will be "the last big decline" seen for a while. A major PP buyer in the Midwest told Plastics News that an April price reduction could be around 2 cents.

"Any PGP movement in April will be much more modest," Newell added. "The U.S. now has the lowest PGP price globally. That should help demand."

He also said North American PP demand has had seven straight months of below average demand, so March demand numbers "will show a decent pop."

The weak PP demand that Newell was referring to was seen in sales data for the first two months of 2018 from the American Chemistry Council. North American PP sales for that two-month period were down almost 4 percent vs. the same period in 2017. A domestic sales decline of almost 3 percent was worsened by a plunge of almost 28 percent for sales into the export market.

Prior to the February slide, North American PP prices had increased for seven consecutive months, with those increases totaling 19.5 cents per pound. Higher domestic demand combined with supply outages had played a role in these price hikes.

Polystyrene up 4 cents

Regional PS prices moved up an average of 4 cents per pound for March after rising 2 cents in February. The hike surprisingly occurred even though benzene feedstock prices declined slightly. The upward push was a result of "production outages down the chain," according to Phil Karig, managing director of the Mathelin Bay Associates consulting firm in St. Louis.

Prices for PS had been flat in January after climbing 5 cents in December, placing the total increase for the last four months at 11 cents.

North American PS sales slumped almost 7 percent in the first two months of 2018. A domestic sales loss of just over 7 percent was softened somewhat by an increase of almost 5 percent in export sales.

PVC up 2 cents

Regional suspension PVC prices moved up an average of 2 cents per pound for March after moving up 3 cents in January. Prior to those increases, PVC prices had been flat in January and down a penny in December.

These February-March increases have taken hold as a result of a stronger export market and because of limited production at some PVC plants in the region, market sources said.

U.S./Canadian PVC sales grew just over 1 percent in January, with export growth of almost 6 percent making up for a decline of almost 1 percent in domestic sales. Two-month PVC sales into its flagship rigid pipe and tubing end market were down almost 3 percent, as winter weather slowed construction activity.


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