Impact Plastics Blog

Resin Price Volatility Leaves Buyers Uncertain

Posted by Natalie K. MacVarish on February 3, 2017

Impact Plastics Resin Pricing.jpgThe start of 2017 was quite a shock for buyers in the plastics industry as price increases hit hard for several polymers. Prices surged in polystyrene and polypropylene within the span of days, with little to no notice and rumors of further increases on the horizon. Given the current volatility of the market there is a lot of uncertainty among buyers of resin and plastic sheet alike regarding whether they should stock up, or hold back. 

To help give some context to the current pricing surge that many plastic sheet customers are seeing, and when you may expect some relief, below is a recap of market pricing reported for the month of January:

Polypropylene (PP)

The turn of the year brought with it a $0.10/lb surge in polymer-grade propylene (PGP) that was immediately passed through to polypropylene resin and polypropylene sheet buyers. While tight supplies of PGP feedstock are partially to blame for this drastic swing, there was no singular event that led to the increase. According to CDI several events may have influenced the dramatic spike:

  • Year-end destocking led to December prices that did not reflect the tight market; when demand resurfaced again in January, buyers faced higher prices.
  • Higher than expected crude oil prices up around $8-$9/B from November to January.
  • Capacity shut-down (both planned and unplanned) from major producers and ethylene crackers.
  • NGL prices (propane, butane) increased significantly as a result of cold weather, causing ethylene costs to favor ethane.
Considering these factors along with the increased demand in December, which was one of the highest monthly sales volumes seen since 2011, the increased starts to make sense. However, to the chagrin of buyers this came with virtually no warning and without the opportunity to purchase before the increase hit. Increases for the month of January pricing settled at a full $0.10/lb, with the potential to see another $0.04/lb in February.

Polystyrene (PS, HIPS)

Impact Plastics Pricing.jpgPolystyrene pricing experienced a $0.05/lb increase this past month due to higher feedstock costs across the board. To start, oil prices were higher than initially estimated with an $8 to $9/B increase over the past two months. Benzene and ethylene prices were also much higher than previous forecasts called for with additional increases projected for next month. The net result of these feedstock increases was a $0.05/lb increase passed on to the polystyrene resin market, with projections for the next month calling for another increase around $0.08/lb. Projections estimate that pricing will level out in March with the potential for decreases next quarter.

Polyethylene (HDPE, LDPE, LLDPE)

PE index prices came in flat in January, but buyers were hit with a $0.06/lb increase right at the start of February. Higher than expected oil prices helped drive international prices higher in January and spot PE resin prices around the globe were up an average of $0.03 - $0.05/lb over the prior month. The weather in mid-December was also much colder than expected, which combined with the higher oil prices helped to push ethylene’s NGL feedstock prices up. In addition, several planned maintenance outages and confirmation of plant start-up delays combined with stronger demand could result in tighter than expected supply. 



The volatility of the resin market can be hard to anticipate and customers should note that Impact Plastics makes no guarantee that fluctuations in price will follow projected patterns outlined.  For more information, contact our team:

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Topics: plastic, plastic sheet, resin, pricing

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