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PS prices drop 5 cents, PP up 1 cent

North American polypropylene makers in June got back the penny they had lost in May, while polystyrene makers saw their two-month increase streak come to an end as prices fell by a nickel.

The 1-cent PP increase for June evened out a similar drop in May and ended a streak in which prices for the material had fallen five times in six months. Even with that increase, regional PP prices are down a net of 14 cents per pound so far in 2015. Prices also had taken a 10-cent plunge in December 2014.

The June PP increase also could be a sign that strong North American demand is finally having an impact on the market. Through May, sales in the region were up 6.4 percent, according to the American Chemistry Council in Washington. Domestic sales growth of almost 7 percent was dampened a little by a drop of 4.5 percent in export sales.

Higher demand drove regional PP producer inventories for May down almost 2 percent to less than 1.46 billion pounds, according to ACC. Regional PP demand growth through May was led by a gain of almost 17 percent in injection molded consumer and institutional products, including furniture and housewares. Regional sales of PP into sheet also were up 13 percent in those five months.

The domestic PP market "is entering a new era," according to Scott Newell, PP market analyst with Resin Technology Inc. in Fort Worth, Texas. "Monomer is plentiful and at the lowest price around the globe, which is very different from recent history."

PP "is seeing growth and high utilization rates and producers have pricing power," he added. "Again, this is all very different from recent history."

The 5-cent PS price drop for June came as benzene feedstock prices tumbled 60 cents per gallon. Benzene prices had jumped a total of 77 cents in April-May, but whipsawed back down, taking PS prices down with them. The April-May benzene hike had lifted PS resin prices a total of 8 cents per pound. With the 5-cent drop, prices for the material now are down a net of 8 cents since Jan. 1.

North American PS sales grew 1 percent in the first five months of 2015, according to ACC. Sales of PS into the market's leading food packaging/food service end market were up almost 4 percent in that period. Food packaging/food service accounted for almost 60 percent of regional PS sales in those five months.

Regional sales of PS to resellers and compounders also were up 11 percent through May. That category accounted for almost 12 percent of PS sales in the region.




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