Polypropylene The spot Polypropylene market has moved 2-3 cents higher since Thanksgiving, but eased a tad this past week. The market has been spurred by a $.04/lb price increase announced for January 1st, in addition to the $.03/lb increase effective for December. Not all producers have necessarily timed and priced their increases the same, but on average, with all increases counted, the winter market could potentially be $.07/lb higher than in the fall.
Some grades, including both 20 melt Homopolymer and Impact Copolymer have become scarce in the market; although higher and lower melts and Random Clarified cars are available. There are also some transitional and blending cars offered at special prices, but they have less desirable melts and Izod strengths.
Many large buyers have pre-bought quite a few cars and seem to be well stocked with resin inventory. They will likely avoid the spot market in the first half of January and refrain from showing substantial demand. This will put them in a better negotiating position and help them resist the higher offering prices that will be presented. This, however, might not be the case for small buyers constrained by capital that have been running down their resin inventories into the year-end. Without the inventory buffer, they may have little choice but to pay the price increase in January.
Although some analysts and traders believe that we will have enough natural gas in storage to satisfy peak winter demand, others feel that supplies will be inadequate especially if we have a colder winter than normal. Natural gas and feedstock costs will continue to affect the plastics market and influence buyers’ and sellers’ decisions about how much inventory they need to maintain and the timing of their buying/selling. We will likely experience periods of extreme price volatility over the next several months; it should continue to be a good resin market.
Polystyrene Spot Polystyrene prices have already firmed at least 2-3 cents since the announcement of a $.04/lb price increase slated for January 1st. Buyers have recognized the probability of this next increase taking hold and have sought spot resin at pre-increase prices. Generic prime and off-grade HIPS and GPPS hopper cars have now all but disappeared but might show up again in January with shiny new price tags. We have seen import resin availability dry up as Asian prices have also aggressively moved higher. Styrene monomer cost pressures and well-balanced supply and demand will contribute to the price increases implementation. Some contract buyers will not see the increase until February.
If you are looking to source spot resin, general asking prices might still be high based on producer replacement costs, but a little patience and deft searches throughout the reseller community (our speciality) we could score you some nice deals. We have a lot of order flow, so the best strategy might be to leave us your buy orders at reasonable prices and we will buy the favourable offers for you as they become available. Likewise suppliers: send us your offers; we have a lot of processors to buy your resin!