The Week in Chemistry: US PE, PP spot prices hold steady for week of Aug. 8, European PE, PP, PVC face bearish near-term outlook amid consumer economic fears; rising supply of butadiene from China sends prices downward to US$1,000/tonne on Aug. 12

Sample article from our Chemicals Industry

LOS ANGELES , August 19, 2022 () –

 

US Resins 

Spot prices for PE and PP resins held steady during the week of August 8, giving producers a break from recent weeks of declining prices. Still, prices may not have reached their lowest yet as ample supply and sluggish demand continue.

During the week, PE trading saw an increase in activity, with large volumes available for export at deep discounts.

Producers are seeking contract increases of US$0.05/lb for August and US$0.06/lb in September, largely seen as preemptive measures ahead of hurricane season.

PP processors have been buying on an as-needed basis, remaining confident due to strong supply and competitive pricing.

PP contracts could see a push for US$0.02-$0.03/lb increase in August amid firm propylene pricing, though the coming weeks could change the outlook.

The primary source of this information is Plastics Today.

 

European Polymers

Key European polymers including PE, PP and PVC this winter face a bearish outlook as the cost-of-living crisis takes its toll on demand. 

The trend is only exacerbated by plans for additional production projects.

PE demand has taken a hit in the consumer durables sector, as consumers hold off on major purchases due to economic fears.

Converters serving food packaging markets have noted reduced demand compared to highs seen during the coronavirus pandemic, returning to 2019 levels.

Northwest Europe PVC spot prices were assessed at €1,730/tonne on August 10, down from €2,050/tonne on May 4.

Meanwhile, homopolymer PP spot prices sank 31.7% from record levels in April, now assessed at €1,400/tonne on August 16.

Similarly, PE plummeted 32.4% during a similar period to €1,500/tonne on August 16. 

Northwest Europe PET spot prices have been weighted by weaker demand after an assessment of €1,750 on July 27.

Worldwide, supply of PE and PP have increased from 115 million tonnes/year and 77 million tonnes/year in 2017, respectively, to 147 million tonnes/year and 99 million tonnes/year

Meanwhile, European PET and PVC producers have reduced their production since July.

The primary source of this information is S&P Global Platts.


Asia commodities

The Asian butadiene market has been characterized by rising supply in China, putting downward pressure on pricing, according to sources.

China’s Shanghai Petrochemical restarted a 120,000-tonne/year butadiene plant during the week of Aug. 7.

In addition, Sinopec Maoming Petrochemical plans to restart a 50,000-tonne/year plant in mid-August.

Zhejiang Petrochemical also plans to increase the operating rate of its new 250,00-tonne/year butadiene plant after mid-August.

In the near future, sources expect butadiene to remain bearish, narrowing the butadiene-naphtha spread.

The CFR China butadiene price declined US$100/tonne day-on-day to US$1,000/tonne on August 12.

CFR Japan naphtha came in lower, at US$710.75/tonne on August 12.

The primary source of this information is S&P Global Platts.
 

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Dan Rivard
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