North American PE and PP Resin Prices Both Slide in May

North American polypropylene resin prices slipped for the second straight month in May, while prices for polyethylene resin also decreased after a flat month.

The PP drop averaged 7.5 cents per pound, market sources said. Prices for the material had dropped 5.5 cents in April. This two-month, 13-cent decline comes after prices rose an average of 20.5 cents in the first three months of the year.

North American PP sales haven't been strong in the first four months of 2017, dropping more than 1 percent vs. the same period in 2016, according to the American Chemistry Council in Washington. Domestic PP sales fell almost 2 percent in that period, while export sales jumped 21 percent.

A 3-cent PE drop for May came after prices had been flat in April and wiped out a 3-cent hike that had taken hold in March. "All the drivers that influenced the first quarter increases have been reversed in April and May," market analyst Mike Burns said in a May 30 email.

Burns, who is with Resin Technology Inc. in Fort Worth, Texas, said PE export volumes were back to average in May and North American processors had built 360 million pounds of inventory. Production disruptions also have been resolved, he added, and there was little or no pre-buying from announced increases.

The regional PE market also is under pressure from low-priced finished PE bags coming in from China, Burns said.

As in the PP market, regional sales of PE weren't robust in early 2017. U.S./Canadian sales of high density PE were down almost 6 percent in the first four months of the year, as a domestic sales gain of 1.5 percent was wiped out by a drop of almost 30 percent in export sales.

Low density PE sales in the region slipped almost 1 percent in that period, with a domestic sales drop of more than 2 percent lessened by an export sales gain of almost 4 percent. In linear LDPE, regional sales grew almost 1 percent, as domestic growth of almost 4 percent was lowered by a 9 percent drop in export sales.

In PE feedstocks, West Texas Intermediate crude oil prices began May around $49 per barrel and were at $49.50 in late trading May 30, for a gain of only 1 percent. Regional prices for natural gas — used as a feedstock in most North American PE — started the month at $3.30 per million BTUs but were at $3.15 in late trading May 30 for a decline of 4.5 percent.