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At The End Of 2018, The Price Of Most Resins In North America Fell To The Bottom.
- Jan 17, 2019 -

At the end of 2018, most resin prices in North American commodity markets fell to rock bottom.

Market sources told Plastic News that the average price of polypropylene (PP) fell by 8 cents per pound in December last year. In addition, the price of all grades of polyethylene (PE) in North America has fallen by 3 cents per pound, the price of solid polystyrene (PS) has fallen by 7 cents per pound, and the price of ethylene terephthalate (PET) resin for bottles has fallen by 4 cents per pound.

Sources said that the fall in prices was mainly due to the decline in seasonal demand and increased supply of resins and raw materials.

PP fell 10 cents/pound in November last year and 18 cents/pound in two months. The price decline is related to the price change of PP raw materials. With the increase of propylene supply, the price of polypropylene decreases.

PP prices in North America fell by 6 cents a pound in 2018, driven by a price dive in December. In addition, the decline in prices was also affected by the rise in imports of PP. Due to some production problems, the supply of PP in North America was tight in 2018, while imported resin was cheap, which led to buyers turning to foreign suppliers.

As of November last year, PP exports in North America had fallen by 32%, while domestic sales were flat, with overall sales falling by slightly more than 1%. However, market observers say that due to the increase in imports of PP, the actual consumption of PP in North America is likely to increase by 3% to 4% in 2018.

Following a fall of 3 cents per pound in November for all grades of PE in North America, prices continued to fall by 3 cents per pound in December, eventually falling by 2 cents per pound for most grades of PE in North America throughout 2018.

Market observers believe that falling oil prices and lower global demand for PE, especially in the packaging market, are the main reasons for the fall in PE prices in November and December. Although most PE production in North America uses natural gas, the global resin market is still affected by oil prices.

As of November, sales of high-density polyethylene (HDPE) and linear low-density polyethylene (LLDPE) in the United States and Canada increased substantially, mainly due to strong export market demand, stimulating capacity growth, and strong local sales growth. According to the U.S. Chemistry Council, total HDPE sales in North America rose by nearly 13% as domestic sales of HDPE increased by more than 6% and exports increased by nearly 43%.

From January to November last year, local sales of LLDPE in North America grew by more than 5%, exports soared by nearly 96%, and overall sales jumped by 24%. Sales of low-density polyethylene (LDPE) grew slowly, rising by only 5% in November, but exports rose by 21.5%.

In November, although the price of raw benzene fell slightly and the price of solid PS remained stable, it fell by 7 cents/pound in December, and finally the price of solid PS in North America dropped by 6 cents/pound in 2018.

In 2018, solid PS sales in North America were poor, down nearly 5% as of November, but exports grew by more than 13%, to some extent mitigating the impact of a 5.5% decline in local sales.

The price of bottled PET resin fell by 4 cents/pound in December, and by 6 cents/pound and 1 cents/pound in October and November, respectively. However, the price of PET resin for bottles in North America rose by 4 cents per pound throughout 2018.

Market observers believe that the main reason for the fall in December prices is the decline in market demand for terephthalic acid and other raw materials and the increase in supply. In autumn and winter, as sales of bottled water and carbonated beverages declined, the demand for bottled resins also declined.