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This page was last modified on Wednesday, February 08, 2012 06:00:23 PM
Newly Updated Today 2-7-12 PRIME PLASTIC MARKETS UP .02-.06/LB. 2-8-12
It was a very interesting week in the plastics markets; uncertain contract pricing has lead to choppy spot
resin trading. Right at the end of the month, several major Polyethylene producers pushed off the Jan
$.06/lb price increase and will now look to implement it in February. This news jolted the market, some
processors rushed to secure additional railcars at flat Jan contact prices (few were available), while
elevated spot PE prices remained mostly steady since the beginning of February was practically already
upon us. Spot Polypropylene prices surged another $.04/lb this past week, as strong spot monomer
indicated sharply higher resin contracts for Feb - but they should ultimately be less steep than the $.22/lb
initially nominated.
US energy markets had a down week; prices have been experiencing see-saw type action. March Crude Oil
futures gave back more than the previous week's gains, dropping $1.72/bbl to settle at $97.84/bbl on Friday.
Natural Gas futures shook off the previous week's short lived recovery, continuing lower to end the week at
$2.499/mmBtu – a loss of $.257/mmBtu. The Crude Oil: Nat Gas price ratio expanded back out to more than
39:1.
The Ethylene market tallied another winning week, extending the streak to 7. Spot trading was very active
with a number of deals seen in both the prompt and forward markets. Front month pricing traded $.02-.03/lb
higher, with the most recent transaction for Feb delivery done at $.65/lb. While the entire forward curve has
moved higher, the bulk of the gains have been in the nearest few months, which is when the majority of
cracker turnarounds will take place. Ethane prices followed upstream Nat Gas lower, shedding about 10%
to end the week at $.525/gal. With Ethane to Ethylene margins more than $.40/lb, producers will look to
perform scheduled repairs expeditiously and bring their crackers back on line as soon as possible!! Polyethylene contract negotiations went down to the wire and processors' resistance paid off, scoring
steady prices for January. There was barely time to celebrate this small victory, because February rolled in
right behind and the $.06/lb increase was again back in play. To add a little fuel to the fire, a few producers
nominated an additional $.07/lb increase for March. There was no big flurry of discounted month-end spot
Polyethylene railcar offers as producers try to maintain upward pressure; however, the spot market is very
well supplied by traders as long as the buyer is willing to pay their raised asking prices. Producer direct
exports are reportedly still moving offshore at a very rapid clip, although exporters are generally not seeing
material priced at such levels to enable high-volume spot sales.
The spot Propylene market continued to be active, trading a number of times as prices consolidated after
rallying sharply during January. There were a couple of RGP spot deals; the most recent was at $.64/lb, the
same as last week. A good amount of PGP supply emerged since prices have risen; several trades were
done priced about steady at $.715/lb and additional material was offered at that level. February PGP
contracts are poised to settle sharply higher, but nominations have relaxed a bit from the $.22/lb shocker to
a still huge $.17/lb and could still wind up a tad less.
Spot Polypropylene prices rallied further, tacking on another $.04/lb, bringing the three week total to
$.09/lb. Spot prices took off on the heels of rapidly rising monomer costs, which point to sharply higher
contract prices for February. Price increase nominations for as much as $.22/lb were issued, subsequently
$.17/lb was floated and buyers are still hopeful for a lower figure. While settlements have yet to occur, a
double-digit gain will be seen. Fresh railcar offerings have been limited as producers would like to gain
clarity on contracts, but some offgrade cars were still sold along the range of the $.70s/lb this past week.
Traders have inventory, but are also reluctant to price it without understanding their replacement costs;
Generic Prime HoPP in the spot market currently seems to be gravitating towards $.80/lb.
Resin contract price volatility defined spot resin trading this past week. Polyethylene buyers received a last-
minute reprieve as January contracts ultimately rolled steady to December. Constant pressure remains
since the $.06/lb increase is back in play for February contracts. While $.06/lb is nothing to sneer at, it pales
to the double digit increase that Polypropylene buyers will endure. Most Polypropylene contracts are
somehow tied to PGP monomer and those prices have been soaring. When the dust settles, Feb PP
contracts will likely see an increase around $.15/lb, plus or minus a couple cents. There is quite a lot of
action and the month has only just begun!!
Spot resin trading was swift; thoughts of higher prices in February had buyers seeking end of the month
opportunities. Average spot Polyethylene prices were steady to $.02/lb higher, while Polypropylene jumped
$.03/lb this past week amid limited material availability and soaring feedstock costs. Jan PE contracts remain
unsettled; despite producers resolve to implement the current $.06/lb increase already invoiced for Jan
contracts, popular consultancies have called the market just steady and $.03/lb higher. Spot Generic Prime
PE railcars are still available in the secondary market $.03 - $.06/lb higher. Polypropylene contracts rolled flat
in Jan, but are poised to rise significantly in Feb on the heels of rising feedstock costs and the desire to expand
resin production margins.
The US energy markets moved higher, more than reversing the previous week's losses. March Crude Oil
futures added $1.23/bbl to end the week at $99.56/bbl. Natural Gas futures finally snapped back, ending a
relative free-fall that saw prices return to decade-ago levels. The March futures contract recovered
$.364/mmBtu, some 15%, to settle at $2.756/mmBtu on Friday. The Crude Oil: Nat Gas price ratio contracted
from the recent record level of 41:1, back down to 36:1, which is still 6X the 6:1 ratio that is generally
considered parity.
The Ethylene market extended its winning streak to 6 weeks, rising further in moderate trading. The spot
market took a step backwards to $.59/lb in the beginning of the week, but then surged several cents to make a
new high for the move. Ethylene for January delivery last traded in the active Williams facility at $.63/lb on
Friday, a penny premium over material for Feb delivery. Forward months are priced at increasing discounts;
Ethylene for the delivery over the entire 2nd half of 2012 was priced at $.55/lb. Ethane shed a couple more
cents to $.585/gal, Ethane to Ethylene margins are simply staggering.
The Polyethylene market remains supported by relatively tight upstream inventories and rising spot monomer
costs. Spot PE prices were steady to higher depending on material; film grades were the strongest,
particularly LDPE, which is suffering from production issues. HDPE supplies remain adequate, although in
many cases, these prices have also ticked higher. Producers and processors continue to spar regarding the
January price increase. Producers remain intent to maintain the $.06/lb increase that they have billed for Jan
and notable market observers who have indicated the market steady to $.03/lb higher. One thing is for certain,
if producers do not get their increase in Jan, they will go for it again in Feb.
The Propylene market was active again and prices charged higher. RGP traded as high as $.64/lb, much
above the Dec trough price of $.38/lb. PGP for January delivery transacted a number of times, reaching
$.655/lb, nearly a dime above Jan PGP contracts. PGP for Feb delivery went on to trade once at $.705/lb;
financially settled transactions for the 2nd quarter 2012 were priced just above and below this level. A
producer has nominated to increase Feb PGP contracts by a whopping $.22/lb; while the spot market has
certainly rallied, $.78/lb for contract PGP currently seems out of line.
Spot Polypropylene continued to rally, adding another $.03/lb; prices are now up about a nickel during
January. This is significant price movement considering that PP contracts were steady in both Jan and Dec.
The current deviation is based on tight inventories from end of the year de-stocking along with tempered resin
production which created an under-supplied environment, and more recently the rapid-run up in spot monomer
costs. Spot monomer for Jan is now nearly $.10/lb above contracts and Feb PGP traded even a nickel above
that, but on low volume. The upward momentum was enough to spur one producer to seek a huge $.22/lb price
increase for Feb Polypropylene contracts. Some buyers have reacted with disbelief, some with anger, while
others are just trying to buy up as much well-priced spot material as possible. We have had some difficulty
moving material in the low $.70s/lb, so asking prices in the high $.80s/lb come next week seems unrealistic.
The resin market's bullish momentum has taken hold. Suppliers are trumpeting higher resin prices and are
pointing to their rising costs. Polyethylene buyers eagerly retort that margin is already plentiful between
Ethane and Ethylene. Polypropylene buyers might recognize that low volume trades are pushing the spot PGP
market higher and might not necessarily reflect the entire market. Either way, we expect to see sharply higher
asking prices in early February. PE producers will seek any part of the $.06/lb increase that might not take hold
in Jan, plus an extra $.04/lb for LDPE. PP producers will be looking for a double digit increase, but it will likely
fall short of the $.22/lb that has just been nominated. Hold on to your hats, this ride could get a bit bumpy.
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Resin market activity was about average; there was a light-to-steady flow of spot material offered and prices rose. Traders with old inventory on-hand are now asking more for their material and after months of steady to
lower markets, buyers are starting to come to grips with the new reality of higher prices. Producers have been
invoicing January Polyethylene contract sales up $.06/lb, looking to build on the successful December
implementation of their $.05/lb increase. Spot PE railcars are generally available up the full 6 and some spot
deals are happening somewhere in between. Jan Polypropylene contracts have rolled steady, but the spot
market continues to make gains amid tight supplies and rising monomer costs.
The US energy markets were lower and front month contracts have begun to roll. March Crude Oil futures
spent most of the week above $100/bbl, but fell on Friday to end the week at $98.33/bbl, for a net loss of
$.55/bbl. March Natural Gas futures continued to erode, erasing another $.321/mmBtu, about 12%, to end the
week at $2.392/mmBtu – a price not seen in a decade. The Crude Oil: Nat Gas price ratio has soared to a new
record level above 41:1, nearly 7X the 6:1 ratio that is generally considered parity.
Spot Ethylene prices continued their winning ways, up again for the 5th week in a row, recording another
$.015/lb gain. The market traded several times with the final transaction on Friday done at $.605/lb, but still
shy of the previous week's high of $.6175/lb. A couple steam crackers are offline for scheduled maintenance,
tightening spot availability. The front few months are trading at a premium to the deferred months when
material availability is expected to loosen. Ethane prices dropped more than 10% this past week to $.605/gal;
contributing to extremely wide margins for the production of Ethylene.
Spot Polyethylene prices continued to rally adding another $.01/lb and have now scored gains in each of the 3
weeks of 2012, for a total of $.06/lb. After finally securing the nickel increase in December, Polyethylene
producers are now working to implement a $.06/lb increase, citing strong spot Ethylene prices. That said, one
cannot ignore the substantial margins enjoyed by integrated producers further upstream in Ethane to
Ethylene production and also back to Natural Gas which just reached a 10-year low. However, it is this very
cost advantage compared to other international Polyethylene producers, who derive most of their Ethylene
from the Crude Oil chain, which has also facilitated a strong base of North American PE exports - more than
800 million lbs in December - about 24% of total sales, helping to keep PE operating rates high and the
Ethylene market snug. Well played, there is pretty good Polyethylene market momentum as pricing power has
indeed shifted back into the hands of the sellers and there is a good possibility that some of the current
increase will also stick in January.
The Propylene market has snapped back to life, trading well off the bottom reached in December. RGP traded
into the $.50s/lb early in the week and was subsequently bid into the mid $.50s/lb, more than 40% above the
Dec low. PGP transacted several times in the spot market reaching all the way to $.6225/lb, up almost $.10/lb
in the past 3 weeks. Recent activity has shrunk the RGP-PGP spread considerably. January PGP contracts
rolled steady at $.56/lb, but are poised to move higher in February based on the spot market. Contrary to
Ethylene, the forward curve for Propylene is upward sloping with prices currently forecasted by traders to rise
further throughout 2012.
Spot Polypropylene prices are on the move, adding another $.02/lb this week based on limited supplies and
rising spot costs. A relatively light flow of offgrade railcars came through the market, but many of the cars
were sold by week's end as buyers, anticipating higher prices in February, began to scoop up well priced
material. Distributor inventories are light and many PP grades are becoming difficult to source. Houston
traders that had been stuck with unsold resin due to sluggish exports saw an uptick in demand and raised their
asking prices for their remaining lots. Polypropylene producers have only managed minimal margins the past
few years and are again looking to increase resin prices in February more than the actual change in PGP
monomer contracts.
The resin markets have established their first trend of 2012 and it is for rising prices. Many market
participants along the resin supply chain reduced inventory into year-end and buyers are at times now
scrambling to restock. Well-priced resin offers have been drying up as buyers grab that which has been
available. There is still resin to be found, but at higher prices, the current availability does not seem quite as
attractive. Although some buyers are already complaining about price, as we start looking into February there
appears to be more room to the upside.
The resin markets were a bit busier as suppliers looked to move moderate volumes of railcars ahead of the holidays and year-end. Processors, who have seen a reduced numberof spot offers during December, bought much of the well-priced resin that was offered. Some sought to build a little buffer for the beginning of January when availability is expected to be tight as producers again look to implement price increases. The US energy markets moved in opposite directions, widening the Crude Oil: Nat Gas price ratio to a record of 31.7:1. Feb Crude Oil futures fully reversed the previous week's results, regaining $5.93/bbl to end the week at $99.68/bbl. Feb Natural Gas prices slid further, dropping another $.027/mmBtu to close the week at $3.147/mmBtu.
The spot Ethylene market saw strength this past week even though all Gulf crackers are fully operational. Ethylene for December delivery changed hands several times at $.52/lb, up more than a penny for the week. Material for January delivery was priced with more than a penny premium over that for prompt delivery. Ethane prices were steady at $.79/gal, widening already healthy margins for Ethylene production.
The Polyethylene market saw some increased activity, but was still relatively subdued as many market participants were gone on holiday break. Average spot PE prices slid a penny; however, they remain at least $.01/lb higher from month ago levels. Producers have not moved off their intent to implement a $.05/lb price increase for December PE contracts, although a number of Generic Prime railcars were sold this week at levels about equal to those in late November, causing some to think contracts could ultimately roll steady. Supplies are reduced throughout the chain, so producers will give it another go in Jan.
The spot Propylene market remained under pressure, although RGP prices were only steady at $.385/lb, it was still the lowest prices in 18 months. After several weeks of lower offers but no transactions, PGP finally traded in the spot market at $.54/lb. This deal was done $.035/lb below the last trade seen at the beginning of the month and $.02/lb under Dec contracts, which at $.56/lb were down $.02/lb from Nov.
The spot Polypropylene market was a little softer, average prices slipped $.01/lb, erasing the small gain garnered at the beginning of the month. Dec PP contracts settled down $.02/lb, bringing 4th quarter relief to $.22/lb. There are some special opportunities popping up in the marketplace, they are mostly for offgrade priced at a nice discount. Although feedstocks for the 1st quarter of 2012 are still priced above spot, weakness in the Propylene market has dragged the entire forward curve lower, reducing the likelihood of a serious price pop in January. Still, overall supplies are generally tight so the spot market could regain some relative strength as buyers re-enter the market in the New Year.
December has been a fairly quiet month, there have been spurts of activity, but the overall theme has been towards a reduction of inventory throughout the supply chain. Dec PP contracts dropped 2-cents; PE producers are still trying to get their nickel increase late in the month, even though spot is up just a penny in Dec and a major consultancy has called the market flat. Barring any surprises during the last week of the year, the market should sail quietly into 2012 just to be met again by another attempt to increase resin prices.
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ThePlasticsNews 12-28-11
The resin markets were slow this past week as many market participants took early leave for
an extended Thanksgiving holiday break. Spot Polyethylene and Polypropylene prices were
steady and the heavy flow of material that has been seen for the past 6 weeks or so took a
hiatus. While there were some Generic Prime and widespec railcars that still required
disposition before the end of November, it seemed that most of the month's business had
already been booked.
The US energy markets were mixed in holiday shortened trading. January Crude Oil futures
continued to give back some of its recent gains, shedding $.90/bbl to end the week at
$96.77/bbl. Jan Natural Gas recovered some of its previous losses, adding $.169/mmBtu to
settle at $3.665/mmBtu on Friday. The Crude Oil: Nat Gas price ratio contracted, but at 26.4:1,
it remains at a historically wide level.
Ethylene prices were mostly steady in light trading; there were just a few transactions seen in
the early part of the week. Ethylene for November delivery changed hands at $.5175/lb,
material for December delivery then traded a quarter-cent higher. Forward interest was
minimal, quoted prices were slightly above those for spot. Ethane prices dropped further, back
down to around $.79/gal, expanding margins for the production of Ethylene to about $.18/lb.
There was relatively light spot Polyethylene trading this past holiday shortened week; prices
were mostly unchanged. While some fresh railcars were shown, the bulk of spot availability
was offered from distributor and trader inventories. Some processors sought extra loads for a
buffer over the long weekend. November Polyethylene contracts are generally being settled
steady for the month; the vast majority of October PE contracts fell $.05/lb, both despite
repeated attempts to implement a $.05/lb price increase. Nominations for a January price
increase began to emerge at $.07/lb; this puts an astonishing $.18/lb on the table!
There was very little activity seen in the Propylene market; not even a single transaction was
reported this past week. Spot PGP previously traded $.585/lb; RGP last changed hands at
$.44/lb and was quoted during the week in the low-mid $.40s/lb. November PGP contracts
settled at $.58/lb, down $.06/lb. Nominations have not yet been seen for December contracts.
Polypropylene prices were steady and activity was muted ahead of the holiday break.
Although November PP contracts settled down $.06/lb along with PGP monomer, spot PP
prices, which had previously traded at a sharp discount to contracts, were just a penny lower
during the month while spot and contract prices converged. Polypropylene contracts fell
$.20/lb during Oct/Nov; however, relatively stable PGP monomer prices over the past several
weeks point to reduced volatility for monomer and resin markets into year-end. Forward month
PGP prices are indicated to rise, so if special buying opportunities are presented in December
they should be considered.
Participants in the Petrochemical markets were apparently more focused on turkeys than
trading this past week, as there was very little activity ahead of the Thanksgiving break. Few
transactions were seen and prices were fairly flat. Highlights include Polyethylene contracts
rolling steady in November and the issuance of a Jan $.07/lb price increase – on top of the $.05/lb and $.06/lb nominations that are a half-year old. Polypropylene contracts were down
$.06/lb in November and it currently appears that only a modest change, if any, will be seen in
December.
China's new regulation shakes up plastic recycling industry
GUANGZHOU, CHINA (Nov. 23, 2011 (SMPI) -- Plastics scrap imports through China’s Guangzhou customs fell by more than 80 percent in the past two months, as the local customs tighten the enforcement of a newly implemented regulation on solid waste import.
The nation’s plastics recycling industry are fearful of a radical shakeup, once the government decides to order all customs across the country to strictly comply with the new regulation.
According to statistics from China’s General Administration of Customs, the first and second quarter this year each saw about 520,000 metric tons of scrap plastics enter China through the Guangzhou customs, but the volume dropped drastically to 240,000 tons during the third quarter, down by 35 percent year on year. Imports in October were only 22,000 tons, down by 82 percent year on year.
The Guangzhou Customs is a gateway that handles a large portion of China’s plastics scrap imports. During the first 10 months, it processed a total of 1,303,000 metrics tons of plastics scrap imports, taking up 20 percent of the nation’s total import volume and ranking first among all customs.
Since Aug. 1, Guangzhou Customs has been a designated pilot site to strictly implement China’s new policy on solid waste imports, causing the recent significant drop.
Beijing issued the new regulation earlier this year, aiming to better control waste imports. Along with solid waste of recycling value, a lot of non-recyclable waste also found its way into China, polluting the environment, said a spokesperson from China’s Ministry of Environmental Protection at the 2011 China Replas in Guangzhou.
Being a major importer of plastics scrap, China relies on imports for half of the plastics scrap it recycles. According to data from the customs, China’s annual imports of scrap plastics increased from 2,460,000 tons in 2002 to 7,400,000 tons in 2010, with an average annual growth rate of 26 percent.3According to officials who spoke at the Replas conference, the new regulation is showing major impact on plastics recycling because: a) it prohibits the borrowing, renting or selling of solid waste import licenses; b) it prohibits the reselling of imported waste materials, and the imported waste must be used as raw materials by the company that is listed on the imported license; c) an importer must conduct the clearance through its local customs, not any customs in the country.
Ding Lisheng, a director from the Guangzhou Customs, said in his speech at the Replas event that the borrowing, renting or selling of plastics scrap import licenses and the reselling of imported waste were “not unusual” in Guangzhou region, due to regulatory loopholes. He said the new regulation can effectively prevent “disordered flow” of solid waste and smuggling.
The new regulation is putting the plastics recycling industry under pressure, as it may significantly reduce imports once the strict enforcement practice is extended to all customs across the country.
Statistics show that China’s total import of plastics scrap felt 11 percent year on year in August, but rebounded by 1 percent in September and 11 percent in October. During the first 10 months, China imported a total of 7,390,000 tons of plastics scrap, up by 5 percent compared to the same period last year.
Toland Lam, president of the China Plastics Processing Industry Association’s recycling committee and owner of recycler T&T Hi-Tech Development Co. Ltd. in Shenzhen, said the new regulation has restricted his company’s operational flexibility in import clearance and increased the costs of imports. He stressed that the industry supports the government’s objective to better regulate the industry but many recyclers are not prepared well enough.
“The impact is strong and we are facing unprecedented difficulties,” Lam said, adding that 30 to 40 percent plastics recyclers in Guangdong province have shut down because of the new regulation as well as the gloomy global economy and increasing labor costs.
Chen Zhuhan, vice president of the CPPIA recycling committee and owner of Zhongheng International Trade Co. Ltd., warned that the strict enforcement of the new regulation will soon be extended to the entire country.
“Once the demonstration period in Guangzhou is completed, the practice will soon be rolled out to other customs in Guangdong and across China,” said Chen.
“I believe a big reshuffle of the industry is coming, therefore everybody should try to prepare for that,” he added. He urged recyclers to transform themselves, devise innovative business strategies, and invest in new technologies.
Paul Yan, chairman of Jiangsu-based Taicang Sicheng Plastics Co. Ltd., also is concerned about the industry’s future. “We talked about the coming thunderstorm at last year’s Replas meeting, and now I should say the typhoon has landed,” he said.
Spot resin trading activity was strong, but completed transactions were off amid waning processor demand.
Average resin prices were steady this past week as limited producer offerings at relatively high prices were
offset by abundant trader supplies that were priced to sell. Fresh Generic Prime PE railcars are still mostly
offered up $.05/lb for the month reflecting producers' recurring efforts to implement a price increase, now in
November. Although Nov Polypropylene contracts will drop $.04-.06/lb, spot prices have bounced from Oct
lows. Resin exports are picking up as producers sell select materials at discounted prices to enable such
transactions.
US energy prices moved sharply in opposite directions. December Crude Oil futures advanced further, closing
in on the $100/bbl level; the market ended the week with a $4.74/bbl gain, settling at a new 3 month high of
$98.99/bbl. Dec Natural Gas futures continued to unwind, sliding another $.199/mmBtu to end the week at
$3.584/mmBtu, just above the 12 month low. The Crude Oil: Nat Gas price ratio has blown out to 27.6:1,
amongst the widest on record. This provides fully integrated North American Polyethylene producers who
derive the majority of their feedstocks from the Natural Gas stream with a significant cost advantage over their
International counterparts that mostly source feedstocks from the relatively expensive Crude Oil chain.
Spot Ethylene prices bounced back a bit further in moderate-volume trading. Several transactions were seen
during the week with the most recent concluded for November delivery at $.51/lb, up nearly $.02/lb from the
previous week. The forward curve remains fairly flat with Ethylene quoted around the same price for delivery
over the next 6 month period. The Net Transaction Price for Ethylene settled at $.54/lb for October, down
$.005/lb.
Spot Polyethylene prices were steady this past week, despite producers' repeated attempt to secure a $.05/lb
price increase (7th monthly try). Instances of both $.03/lb and $.05/lb reductions were seen for October PE
contracts, but a nickel was more common. Fresh railcar offers were limited this past week and generally quoted
up the nickel with the caveat that the price would be adjusted if the increase did not hold. Distributors and
resellers continue to fill supply voids with warehoused resin and material availability swelled to the highest level
seen this year. Many Houston traders remain eager to liquidate high-cost inventory that accumulated when spot
exports to key Asian and Indian regions dropped off during the 2nd and 3rd quarters. Some reported higher-
volume export sales in late Oct and early Nov which were price-supported by producers looking to move their
own inventory. Better exports and reduced PE production more than offset sluggish domestic demand helping
producers to liquidate just over 100 million lbs of upstream inventory in October.
Spot Propylene prices were mixed in moderate trading. November PGP traded several times with the most
recent at $.5875/lb, up $.0025/lb for the week. Material for prompt delivery continues to trade lower than the
forward months. RGP was weak, falling a few cents in a series of trades, last changing hands at $.4425/lb. The
PGP-RGP spread has widened out to $.145/lb, this could correct lower when the Propylene Dehydro Unit
returns back online from maintenance. November PGP contracts have initially settled down $.06/lb, more than
the $.04/lb initially nominated; if it goes industry-wide, it would bring the 2-month decrease to $.20/lb.
It was the second straight week of steady Polypropylene prices – quite a change from the sheer fall during
Sept/Oct when spot prices plunged $.19/lb. The contract and spot markets are finally catching up with each
other. This is due to both the spot market recovering from the Oct low, while contracts shed another $.04 -.06/lb
in November (likely the whole $.06/lb) in addition to the $.14/lb reduction in Oct. Polypropylene operating rates
in October were around 85%, which is about the average of the past 6 months and also the past 5 years. A slight
uptick in exports offset the slide in domestic demand, but upstream resin inventories still grew a bit and are right
off the 3 year peak. Processors are generally looking to reduce resin kept on-hand into year-end, so even
though the market has found some stability, spot market softness could again lie ahead.
Buyers turned shy this past week and producers were coy with their supply, seeking quiet channels – only
traders wore their selling spirit proudly on their sleeves. The common theme amongst the players was a
movement towards lighter year-end inventories. Consequently, spot supplies offered through The Plastics
Exchange bulged to the highest level in more than a year, pointing to some potential weakness ahead for resin
prices. Processors are not taking Polyethylene producers' collective cry for their Nov $.05/lb price increase very
seriously; it is probably time to retire that effort and come out with something fresh like $.03 or $.04/lb for Dec or
more realistically Jan. PGP and PP contracts are leaning towards a $.06/lb decrease for Nov, some spot
weakness is anticipated for PP resin.
Crackdown impacts scrap market 11-15-11
Local governments in China are trying to better regulate the plastics recycling industry, sometimes at the expense of job losses and market disruption. In Wen'an, Heibei province, nearly 100,000 people are reportedly jobless from a recent crackdown.
Aiming to stop the pollution caused by washing and reprocessing plastic scrap and to improve the local environment, according to the Beijing News, Wen'an's government started in July what it called "the most forceful campaign" in October and Novmber, not only shutting down recycling operations, but also blocking trucks that carry raw plastics waste from entering the town, known as "the capital of plastics scrap" in North China.
Unlike previous crackdowns, the report said, the new town officials are enforcing the ongoing campaign thoroughly and consistently. They dissemble and confiscate processing equipment, and even shut down power supply.
About 125 miles away, scrap collectors and brokers in Beijing saw their inventory rise and prices drop, with the exception of PET bottles, which are recycled in Beijing.
A trade group official told the Beijing News that Beijing generates 1,800 metric tons of plastic waste every day, the majority of it landfilled. The recyclable ones, estimated to be 200 to 300 metric tons, mostly end up in Wen'an.
But since the majority of plastics scrap that flow into Wen'an is imported, the current crackdown has also lead to pileup of imported plastic waste in nearby ports.
ThePlasticsNews 11-7-11
Spot resin trading slowed a bit this past week; the market remained under pressure and offers
accumulated amid lackluster demand. Spot Polyethylene prices were steady to down a penny and
Polypropylene prices eroded another $.04/lb. Resin contracts are settling lower; Polypropylene buyers
on average are paying $.14/lb less for branded prime purchases in October, while Polyethylene market
participants are still sparring regarding the price break for October – it will be somewhere between $.03 -
.05/lb.
US energy markets were mixed and front month futures contracts rolled to December. Crude Oil futures
continued its recent winning ways, rallying $.40/bbl to end the week at $87.840bbl. Dec Natural Gas
futures eased $.074/mmBtu, to settle at $3.629/mmBtu on Friday. The Crude Oil: Nat Gas price ratio
expanded back out to 24:1, much to the benefit of North American integrated PE producers compared to
their international counterparts.
The spot Ethylene market began to recover after sharp losses during September and two weeks of
essentially steady pricing in October. Early in the week, Ethylene for Oct delivery traded a tad higher to
$.485/lb, but was subsequently bid as high as $.52/lb. Similar bids and/or trades were seen in forward
markets for the next several months. Ethane prices rallied further, reaching $.94/gal, but the larger gain
in spot Ethylene was enough to expand margins. Once again, steam crackers have been brought back on
stream after maintenance, while others were taken offline, maintaining operating rates in the lower 90s%
range.
Polyethylene price pressure persists, peeling a penny from practically all products. Some super-sharp
spot specials circulated in the secondary market spurring sales, satiating short-term demand, while
producers and processors pursue prime pricing for October contracts. The gap remains at $.02/lb, as
suppliers have offered to decrease prices by $.03/lb while buyers still seek a nickel relief. Inventories are
heavy and a challenging spot export market, particularly to key India and Asian regions, has made it
difficult to purge excess supplies. However PE prices have been falling and the US Dollar has become
weaker, while Crude Oil, which is the primary feedstock for Polyethylene in “the rest of the world”, has
been rallying. Together this all moves in the same direction to help spur renewed demand for US material.
Propylene prices continued to slide in the beginning of the week, but they recovered by Friday; overall
the market was fairly stable considering the recent sharp losses. RGP fell as low as $.425/lb before
bouncing to last trade at $.45/lb, still down a half-cent for the week. PGP prices actually added a penny,
last transacting at $.55/lb; Nov PGP traded as high as $.57/lb, but these prices are still well below the
October PGP contract settlement of $.64/lb, which was down $.14/lb from Sept. The forward market
through 2012 is indicated higher than current spot.
Spot Polypropylene prices shed yet another $.04/lb, bringing offers for Generic Prime resin well below
average October contracts, which were down $.14/lb along with the same drop in PGP monomer
contracts. Market participants are looking ahead to the November market, which is indicated sharply
lower again based on recent spot PGP levels. Processors have limited contract railcar orders preferring
to buy next month, suppliers facing burdensome inventories countered by discounting the material now
to generate additional spot sales. Spot Polypropylene prices have fallen $.15/lb so far during October
and currently sit $.33/lb below the peak price reached in May, 2011.
Resin prices continued to drop this past week, once again Polyethylene more so than Polypropylene. Do
note though that stable / recovering spot monomer costs, coupled with the resilient stock market and
rising Crude Oil prices, could begin to lend at least psychological support to plastics prices. While spot
resin could be carried still lower on momentum, there seems to be value at these levels. Unless new
fundamentals come to affect the market, we could be getting close to the bottom of this cycle – at least in
spot. PP contracts will most likely fall again in November, and PE contracts could have a little more
downside if only $.03/lb officially comes out of the market in Oct. Incremental spot exports have the
potential to resume, but this has still yet to develop.
ThePlasticsNews October 24, 2011
MARKET UPDATE IN THE PLASTICS INDUSTRYCopyright © 2011 The Plastics Exchange, LLC. | Patent Protected | All Rights Reserved.
Lower resin prices and plentiful spot material brought good trading activity and higher transacted
volumes on The Plastics Exchange. Average spot Polyethylene prices shed $.01/lb and some fell
$.02/lb, although our benchmark HDPE Blow molding grade, which is the least expensive PE material,
held steady. Polypropylene prices continue to recede, giving back another $.04/lb. Commodity resin
contracts will settle lower in October; Polypropylene will likely drop $.14/lb along with PGP contracts;
the $.05/lb Polyethylene price increase has been delayed for the 6th month in a row and contracts
have instead been offered $.03/lb lower, while buyers are seeking a larger decrease.
US energy markets rebounded substantially, particularly on Friday. November Crude Oil futures saw
similar gains as the previous week, adding another $3.82/bbl to close out at $86.80/bbl. November
Natural Gas futures recovered the previous week's losses and then some, jumping $.222/mmBtu settle
at $3.703/mmBtu on Friday. The Crude Oil: Nat Gas price ratio contracted slightly to a still wide level of
23.4:1.
After falling sharply during September, spot Ethylene volatility has diminished and prices were
virtually steady for the second week in a row. Spot trading volumes were relatively light and several
trades were consummated around $.48/lb; the final at $.4825/lb – around $.15/lb below the level seen
at the beginning of September. Ethane prices surged again, trading into the $.90s/gal, squeezing
cracker margins to under a dime. One steam cracker was brought back on-stream after a period of
maintenance, while another was taken offline for scheduled maintenance, keeping potential operating
rates in the lower 90s% range.
The Polyethylene market remains under pressure; spot availability is high and prices are slipping.
Average spot PE prices eased about $.01/lb this past week. Although producers throttled back
Polyethylene reactors below 90% capacity, sales in September were off about 200 million lbs from
August and inventories remain 100 million lbs above than the trailing 12 month average. Half a dozen
attempts at the nickel price increase have failed; instead a decrease will again be seen in October;
some producers have suggested $.03/lb, ironically processors are generally looking for a nickel.
Weakness in the Propylene monomer market persists, but the descent in prices has slowed. After
losing $.18/lb over the previous two weeks, RGP prices shed just $.005/lb more, last transacting at
$.455/lb. The spot PGP market dropped another $.02/lb to $.54/lb, a full $.10/lb below the price agreed
for October contracts, which was down $.14/lb from Sept. PGP has some value in the low-to-mid $.50s,
already down some $.43/lb from it's peak in May. Forward markets through 2012 are still priced along
the range of the $.60s/lb.
The spot Polypropylene market continued to unwind last week, eroding an additional $.04/lb from
already depressed prices. Processors, expecting a break, worked down inventories to bare-bone
levels and were happy to place contract orders at the beginning of the month, when monomer and resin
contracts settled down $.14/lb. However, PP contract orders slowed last week after cheaper Generic
Prime prices began to filter through the market. The deals are supported by spot monomer costs a
dime below Oct contract costs, which point to lower monomer and resin contracts again in November.
Resin market sentiment remains negative, but has become a bit less bearish now that prices have
already fallen sharply. Downward momentum could carry the market still lower; however, higher rising
Crude Oil prices could also help limit further losses. In the meantime, resin buyers are happy to have
some pricing power and will enjoy the savings for October contract purchases including $.14/lb for PP
and $.03-.05/lb for PE. Although direct Polyethylene exports are reportedly still flowing at a decent
clip, spot exports remain challenging; Polypropylene exports are paltry – the lowest in 5 years.
International resin buyers in Europe and South America are receiving more competitive offers from
traders in the Middle East and Asia hampering incremental sales, but export requests are again
starting to increase.
Virgin and Scrap Plastic For Sale.......Please inquire at
inquiry@scrapmetalsandplastics.com - 10-18-11
Material | Description | Color | Condition | Lbs |
ABS | Lustran 433 NON FR | Natural | Virgin | 9,345 |
| Porene SP100 6MLT 6IZ High Gloss | Natural | Vir-Bags | 22,380 |
ABS/PC | Thermocomp PCA-F-1001 BK8250 GF NFR | Black | Vir-Box | 8,650 |
ACETAL | Celcon M90 | Natural | Regrind | 12,905 |
| Delrin 500T | White | Regrind | 14,535 |
| Kocetal K300 | Natural | Vir-Box | 3,700 |
| Kocetal K300 | Natural | Vir-Bags | 2,200 |
| Lupital F10-02 | Natural | Vir-Bags | 1,540 |
ASA/PC | Geloy XP4034-WH6A053 18MLT | Gray | Vir-Box | 8,800 |
NORYL | Noryl GFN2 20%GF | Black | Regrind | 9,165 |
| Noryl GTX679-1749 | Black | Vir-Box | 23,000 |
| Noryl GTX8408 | Mixed | Regrind | 375 |
| Noryl GTX8408 | Black | Regrind | 6,400 |
| Noryl GTX8408 | Gray | Regrind | 270 |
| Noryl GTX8408 GF | Green/Natural | Regrind | 380 |
| Noryl GTX8408 GF | Green | Regrind | 325 |
| Noryl GTX8408 GF w/ Powder | Gray | Regrind | 1,835 |
| Noryl GTX8408 GF w/ Powder | Dk. Mixed | Regrind | 1,425 |
| Noryl GTX8408 GF w/ Powder | Black | Regrind | 1,255 |
| Noryl GTX8408 GF w/ Powder | Black | Regrind | 3,015 |
| Noryl GTX9400W-1710 | Black | Vir-Box | 3,840 |
NYLON | Type 6 40%GF | Black | Vir-Box | 8,520 |
| Type 6 40%GF | Black | Vir-Box | 14,680 |
| Type 6 33%GF | Black | Vir-Box | 18,985 |
| Type 6 33%GF | Black | Vir-Box | 1,110 |
| Type 6 50%GF | Natural | Vir-Bags | 13,660 |
| Type 6/6 25%GF | Black | Vir-Box | 4,380 |
| Type 6/6 30%GF | Black | Vir-Box | 7,665 |
| Type 6/6 50%GF | Black | Vir-Box | 4,245 |
| Type 6/6 25%GF | Black | Vir-Box | 11,610 |
| Type 6/6 33%GF | Black | Vir-Box | 9,915 |
| Type 6/6 Unfilled | Black | Virgin | 29,770 |
POLYCARBONATE | 12MLT 14IZ UV and Release 112 Tint | Clear | Virgin | 17,735 |
| 20MLT 14IZ UV and Release 112 Tint | Clear | Virgin | 11,805 |
| Lexan ML9383-116 12MLT 14IZ FR | Clear | Vir-Box | 38,170 |
POLYESTER | PBT Valox 451E 20%GF FR | White | Regrind | 6,370 |
| PET Bottle Grade w/ Print | Clear | Regrind | 22,160 |
| PET Rynite 530 30%GF | Yellow | Regrind | 17,895 |
| PETG Kodar 6763 | Clear | Regrind | 8,390 |
POLYETHYLENE HIGH | Blow Mold Grade Frac. MLT w/ PP | Mixed | Regrind | 19,800 |
| Frac. MLT w/ PP | Mixed | Regrind | 32,480 |
| Frac. MLT w/ PP | Mixed | Regrind | 17,740 |
POLYETHYLENE LOW | LDPE/Nylon/Eva w/ PP/HDPE/Metal | Mixed | Regrind | 48,895 |
POLYPHTHALAMIDE | LNP Verton UF-700-10 HS GF | Natural | Vir-Bags | 4,495 |
POLYPROPYLENE | CO 50%GF | Natural | Regrind | 35,330 |
| Floorsweep | Mixed | Regrind | 43,690 |
| Homo H3000A 28MLT | Natural | Vir-Box | 13,190 |
POLYSULFONE | Amoco Udel P-1700 6.5MLT | Natural | Regrind | 1,910 |
| Ultrason S-2010 G4 20%GF V1 FR | Natural | Vir-Bags | 5,570 |
STYRENE | GPPS Extru. Grade w/ Ink/PET | Clear | Regrind | 67,670 |
| HIPS | Natural | Repro | 22,585 |
TPE | Santoprene 203-40 | Black | Regrind | 4,960 |
| TPV Santoprene 64A Duro | Black | Virgin | 2,630 |
| TPV Santoprene 73A Duro | Black | Virgin | 5,645 |
| TPV Santoprene 87A Duro | Natural | Virgin | 6,750 |
ULTEM | Ultem 1000-1000 | Natural | Vir-Bags | 2,200 |
| Ultem 2310 33%GF FR | Mixed | Regrind | 8,680 |
| Ultem 2412EPR-1000 40%Milled GF | Natural | Vir-Bags | 3,005 |
| US companies to collaborate to establish JV projects to recycle waste into Plastic and Oil 10-13-11 |
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| | Green EnviroTech Holdings Corp. has signed a Letter of Intent (LOI) with 5 Stone Green Capital, LLC (5 Stone), a fund manager based in New York. Under the LOI, both parties agree to collaborate to establish joint venture projects in recycling waste into plastic and oil within the United States and internationally, the initial focus being in the United States. The initial project identified for collaboration under the LOI is the development of a plant in Sheboygan, Wisconsin, that is anticipated to require USD 5 million in the form of convertible debt financing, or alternative financing that will acquire the building or equipment required for the plant. Under the LOI, 5 Stone has a right of first offer to provide financing on subsequent GETH projects where shredder residue will be consumed, plus the right to participate in any future financing of projects for shredder residue recycling for up to 20% of the total financing. 5 Stone will work closely with GETH in strategic development and will utilize their expertise to maximize governmental support and to locate future sites. Gary De Laurentiis, Chairman and CEO of GETH, said, "By working with 5 Stone GETH benefits from both their financing and expert knowledge of developments in the environmental field. I look forward to a very meaningful partnership with them." |
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PET buyers in Asia reduce purchase volumes in anticipation of further pricee Decrease 10-3-11
Polyethylene terephthalate buyers in Asia have slashed purchase volumes despite cooling PET prices in the region after a recent surge, as they expect prices to fall further, as per Platts.
PET prices started trending lower in the past two weeks on lower feedstock costs, with FOB Northeast Asia assessed at US$1670/mt on Wednesday, down US$45/mt week on week, while FOB SEA prices were assessed at US$1690/mt, down US$50/mt over the same period. Based on the latest feedstock prices, the breakeven price for PET is estimated at US$1613.24/mt, down US$110.56/mt from last week. On Wednesday, CFR China monoethylene glycol was assessed at US$1212/mt, down US$108/mt week on week, while CFR China purified terephthalic acid was assessed at US$1238/mt, down US$52/mt over the same period.
The dip in the past weeks comes after five consecutive weeks of increasing prices.
Buyers have adopted a wait and watch policy or are buying limited volumes to meet immediate requirements, or breaking down their demand into smaller batches in the belief that prices will fall in the short term.
The spot resin markets remained active, elevated volumes of materials continued to flow while PE and PP
prices fell $.01-.02/lb. Energy and feedstock costs came down during the month and relatively high
upstream resin inventories kept spot resin availability abundant. The spot export arbitrage is closed due to
weak international prices and the strengthening US dollar; the current rate of $1.345 to 1 Euro has not been
seen since Jan. Well-priced Asian resin offers to Latin American buyers have limited the natural US export to
this region, further backing up resin. Despite nominations and producers' early month aspirations for higher
resin prices in September, average contracts for both Polyethylene and Polypropylene are settling steady at
best.
US energy markets were sharply lower this past week driven by economic concerns and the stronger dollar.
November Crude Oil futures, which rolled to the front month contract, fell $8.33/bbl, nearly 10%, to end the
week at $79.85/bbl. November Natural Gas peeled off $.156/mmBtu to close at $3.766/mmBtu on Friday, the
lowest front month settlement in nearly a year. The Crude Oil: Nat Gas price ratio contracted a bit to 21.2:1.
The spot Ethylene market continued to slide and in fact the losses have accelerated. Material for prompt
delivery traded down to $.5275/lb, $.045/lb below the previous week's close and more than a dime lower
than prices seen a month ago. Spot Ethylene has not traded at this level since the end of February. The
market sustained sizable losses even though 2 Gulf area crackers are currently offline for scheduled
maintenance. Most of the of the recent price break came out of Ethane-to-Ethylene margins, which had
expanded to the high $.20s/lb and now sits at a still very wide level in the high-teens. With much of the
prompt premium eliminated, the forward curve for the next three quarters has flattened but still trends
slightly lower; however, Ethylene for delivery during the 2nd half of 2012 was indicated down into the very
high $.40s/lb. Spot Ethylene is now trading below August's Net Transaction Price of $.555/lb. NTP is an
important component of Ethylene contracts and internal transfer prices at integrated Petrochemical
companies.
The spot Polyethylene market remained under pressure with average prices dropping $.01-.02/lb this past
week. The fifth attempt to implement a $.05/lb PE increase didn't have much of a chance in September and
with spot monomer costs falling about $.10/lb during the month, PE producers will be fortunate to just hold
average contracts steady. Some producers have officially postponed the nickel increase, but contracts are
not completely settled and it is possible to still see a couple cents erosion - if not in Sept, probably Oct.
Demand seemed to suffer in Sept; domestic orders have been disappointing, especially considering a more
normal seasonal up-tick as in past years. Exports are hampered by falling international prices and the rising
value in the US dollar, making foreign purchases of US material seem more expensive. Upstream
inventories are heavy, so some sharp spot specials are surfacing as suppliers seek to salvage sagging Sept
sales - the third quarter ends this coming week.
It was another slow week for the Propylene market; once again just a single spot deal was recorded. RGP for
September delivery traded at $.64/lb, $.03/lb below the previous transaction. PGP went un-traded, but was
offered at $.76/lb; there was no buyer interest in this relatively illiquid market. September PGP contracts are
priced at $.78/lb and should feel some pressure going into October negotiations.
The Polypropylene market maintained the negative sentiment that has been prevalent throughout the
month. Railcars of Generic Prime PP Homopolymer were offered a penny lower and are now about $.03/lb
below the level seen at the beginning of September. Although demand is weak and is weighing particularly
heavy on the widespec market, the contract market is supported by PGP monomer contracts which managed
to roll steady in Sept, the second month in a row. The export market is not providing much help, so end of the
month/quarter deals are floating around – for those that can use an extra few railcars or truckloads.
Many processors complain of poor resin throughput and disappointing orders at this time of the year, some
worry that the unimpressive back-to-school season will continue on through the holidays and are even
selling un-needed resin inventories into the spot market. Lower energy and feedstock costs have added to
the bearish bias currently felt in the commodity resin markets. At least a couple cents could realistically
come out of October PE and PP contracts. Resin prices, which are generally fast to go up and slow to come
down, are still stubbornly high and a bigger correction might be needed to help rebuild demand.
Paid advertisments.....If you are interestde in advertising rates please contact greg@scrapmetalsandplastics
This week, market prices of PET scrap edged up in spite of the average performance in spot supply. The increasing gap between the slack demand and high quotations placed difficulty in deal completion. Both parties of the transaction mainly made operation in accordance with market conditions, with a calm mentality.
Market Movement of Scrap PET:
This week, market movement of PET scrap went steadily with major increases in flake market. In terms of the supply, the flake kind was sufficient while the rolled film suffered a tightness. In futures market, prices stood at a high level as usual. Recently, PET scrap market saw a consecutive rise in prices but the passion to stock up seemed to be insipid. Goods holders made delivery on market fluctuations and showed normal enthusiasm in trading. In the downside, enquiries performed with vigor but orders were placed at small amounts for the overall demand was bland. In general, operations by the buying and selling participants were conducted with prudence. The receipt of goods was fair in spot market whereas the trading volume in futures market was limited, resulting in an ordinary deal sentiment as a whole.
The latest data showed that, this past week, PET scrap enjoyed a slight increase amid the overall stability. The hike was mostly seen in the flake market with a range of 100-200 RMB/ton uplift. As there was no obvious increase in overall demand, the trading situation remained the same as previous days.
Market quotations of unwashed PET flake: clean (with few trademarks and bottle caps) 6700-67100 RMB/ton; green 5500-6000 RMB/ton; blue 5900-6500 RMB/ton; three-color 5200-5700 RMB/ton; mixed color 5000-5500 RMB/ton, all 200 RMB/ton higher than last week.
Market quotations of washed PET flake: clear (without trademark and bottle cap) 8600-9100 RMB/ton; blue 8000-8600 RMB/ton;green 7900-8400 RMB/ton, all 100 RMB/ton higher, compared with last week.
Market quotations of PET sheet and film: clear vacuum-thermoform sheet 7800-8400 RMB/ton; Favrini film 4700-5200 RMB/ton; clear adhesive rolled film 8200-8600 RMB/ton; printing film in roll 4900-5400 RMB/ton.
Market quotations of other PET materials: white waste silk 7200-7700 RMB/ton, up 200 RMB/ton; clear cellosilk 8000-8500 RMB/ton, up 100 RMB/ton; white non-woven in bale 6200-6800 RMB/ton; clean bottles in bale 6600-7100 RMB/ton; blue and white bottles in bale 6200-6700 RMB/ton; green bottles in bale 5500-6300 RMB/ton; clear bottle framings 7900-8300 RMB/ton.
Outlook on the Afternoon Session:
This week, PET scrap market saw a slight increase in the main with stability as traders were not optimistic about the outlook of the later market performance. With a considerable support from the cost aspect, scrap prices enjoyed hikes in a row. However, the slack as usual downstream demand weighed on trade conclusion with pressures, leading to a flat trading volume. It's predicted that market prices of PET scrap would move with narrow changes in the coming days.
(1RMB=0.1564USD)
8-23-11
This week, with the oscillating movement of international raw oil price, PP scrap prices also saw slight ups and downs. The trade situation went slowly without obvious improvement in market demand.
Market Movement of Scrap Plastics:
This week, market movement of PP scrap waved slightly along with the shaking raw oil price. In spite of a sufficient market supply, the imported volume from foreign market suffered continuous declines, leading to tight supply situation in several varieties. Goods holders sold at small amount with high offers whereas downstream buyers procured on demand with little intention to stock up. As a result of the cautious attitude of both trading parties, the trade situation was trapped in a deadlock amid a watching sentiement.
According to the latest data by WorldScrap, the market prices of PP scrap this week saw slight ups and downs. With slack downstream demand, the trade volume was average.
Market Quotations for PP woven bags: white ton bags 5000-5500 RMB/ton; yellow ton bags 4400-4800 RMB/ton; mixed color agricultural woven bags 2700- 3200 RMB/ton.
Market Quotations for PP films: printing film in bulk 3700-4100 RMB/ton, 100 RMB/ton higher than last week; pringting film in roll 4600-5000 RMB/ton, 100 RMB/ton higher; BOPP clear film off-cuts 7000-7400 RMB/ton; BOPP clear film in roll 7800-8300 RMB/ton.
Market Quotations for PP non-wovens and waste silk: white non-wovens 6300-6800 RMB/ton; mixed color non-wovens 3800-4300 RMB/ton; unicolor waste silk 5400-5800 RMB/ton; mixed color waste silk 3600-4000 RMB/ton.
Market Quotation for PP products: CD box 3500-3900 RMB/ton, 300 RMB/ton higher than last week; bottles in bale (clear) 5200-5700 RMB/ton, 200 RMB/ton higher; waste hanger 3800-4200 RMB/ton; waste lampshade 3800-4200 RMB/ton, 200 RMB/ton higher week over week; waste bottle cap 4600-5000 RMB/ton; bumper 4000-4400 RMB/ton; mixed color packaging belt 2900-3500 RMB/ton; white rope 4900-5400 RMB/ton; waste carpet 2400-2700 RMB/ton.
Market Quotations for PP regrind or shred: clear regrind 9800-10400 RMB/ton, 100 RMB/ton lower than last week; unicolor regrind 8100-8500 RMB/ton; mixed color regrind 5600-6100 RMB/ton; clear shred 8900-9300 RMB/ton, down 100 RMB/ton w-o-w; unicolor shred 7000-7400 RMB/ton; mixed color shred 5100- 5500 RMB/ton.
Outlook on the Afternoon Market:
This week, PP scrap market was depressed by the dominant negative information from many aspects. Though downward adjustments were seen among several quotations, varieties with rally still existed. The market was entering a situation of oscillation, but the sliding range was limited. In the market transaction, the delivery of goods performed more than the receipt of goods. It's predicted that the movement of PP scrap would remain its volatility at low level in the coming week.
SCRAP PLASTIC AND RESIN CURRENT ACTIVITY
Spot resin trading was better; activity picked up with a good flow of material seen at lower prices. It did
not take long into June for the second attempt to implement the $.05/lb Polyethylene price increase to
fizzle out. Not all producers have completely conceded the increase, but prospects are looking dim. After
a series of sharp monthly increases, Polypropylene buyers are finally getting some relief with contract
prices for PGP and PP coming off a full $.15/lb in June, which is more appropriate than the initial $.07/lb
decrease offered. Spot resin exports remain complicated by competitive offers from other regions,
leaving the domestic market responsible for balancing off growing supplies.
US energy prices were mixed. July Crude Oil futures eased $1.28/bbl to end the week at $99.29/bbl. July
Natural Gas futures continued to rise, reaching nearly $5/mmBtu, before setting back to $4.757/mmBtu,
still a $.068/mmBtu gain for the week. The rally in Nat Gas has helped bring the Crude Oil: Nat Gas price
ratio in to 20.8:1
Spot Ethylene prices rebounded in heavier trading. June Ethylene traded many times with Friday's final
transaction at $.675/lb, up $.025/lb from the previous week. Ethylene for July delivery was also busy,
mostly trading about a penny below June. Several steam crackers that had been down for maintenance
returned online, thus increasing Ethylene production capacity. As a reminder, Ethylene's NTP for May
was $.585/lb up $.0125/lb from April which was a smaller rise than some had anticipated.
The spot Polyethylene market was under pressure with prices falling as much as $.02/lb this past week.
Resin availability increased and Generic Prime railcars have made their way in to the spot market.
Although spot Ethylene monomer has been elevated to the mid-upper $.60s/lb, the May Net Transaction
Price (NTP) for Ethylene was just $.585/lb, enabling healthy margins which encouraged robust
Polyethylene production. However, slacking demand from both the domestic and export markets led to
bulging producer inventories which helped stifle the $.05/lb increase effort in May and now again in June.
There has been a Polyethylene price increase on the table practically each month since the last time
contracts actually saw a decrease more than a year ago. Although there is currently some negative
sentiment in the PE market due to the inability to raise prices further, this should not be construed as an
outright bearish signal. However, it would not be out of the question to perhaps see a little erosion occur
during the summer.
The Propylene monomer market continued to unwind some of the massive gains garnered the previous
few months. RGP traded several times and shed another penny, last changing hands at $.72/lb. June
PGP contracts settled at $.82/lb, which is a $.15/lb decrease from May; for those downstream, this is a
much better outcome than the $.07/lb relief initially offered. PGP traded in the spot market at $.795/lb; it
had been about 8 weeks since the last spot transaction was recorded.
Polypropylene prices continue to unravel, peeling off another $.03/lb in the spot market this past week.
There is ample PP resin availability and the lower prices are making their way through the industry.
Although resin production was lighter in May, demand was even softer leading to a bulge in upstream
inventories - neither of which was unexpected given that May PGP settled early with a huge gain and
then spot PGP was indicated lower the balance of the month. It became obvious that June PP contracts
would be sharply lower so processors bought as little resin as necessary to just get by. Indeed June PP
contracts will settle $.15/lb lower along with the same change in PGP monomer contracts.
Spot resin markets were weaker and availability increased, providing plastics buyers in general with the
first bit of pricing power in ages. Based on current market activity, it is doubtful that PE producers will be
able to fully implement their $.05/lb price increase and some have suggested that a portion of the $.06/lb
increase implemented in April could come off in June or July. PP buyers are enjoying the $.15/lb of relief
afforded for June contracts and spot PP prices are weaker still, with some widespec opportunities
available just above the price of monomer. The spot export markets are still slow and would require lower
prices than currently offered to move significant volumes of material offshore
Anti-Trust Allegations Hit Plastic Players
A Massachusetts-based recycling firm has filed a lawsuit in federal court alleging that five large plastics companies and the American Chemistry Council have illegally conspired against the company, resulting in harm to its business.
Evergreen Partnering Group, Inc. (EPG), a North Reading, Massachusetts company that offers a patent-pending closed-loop recycling method for polystyrene trays designed for large school systems and other institutions that provide food service, filed the lawsuit in the U.S. District Court for Massachusetts.
According to court documents, EPG commercialized its recycling program in Atlanta with the Gwinnett County Public Schools, had 25 pilot programs with schools in the Miami, Florida area and has also done business with school systems in Boston and Rhode Island among others.
A number of other government and educational entities had also expressed interest in its services, according to the suit, but deals never came to fruition.
The suit alleges that EPG's business was thwarted by five companies that have significant sway over the polystyrene market, including Pactiv Corporation; Genpack, LLC; Solo Cup Company; Dolco Packaging and Dart Container – all of which were named as defendants along with the American Chemistry Council and its Polystyrene Foodservice Packaging Group. EPG is seeking $25 million in damages for violations of antitrust laws, false advertising, unfair business practices, trade libel and interference with EPG's prospective economic advantage and contractual relations.
The suit contends that industry leaders Pactiv and Dart have actively resisted recycling of polystyrene because if it were to be done successfully, environmentalists and regulators would pressure makers of the material to recycle their products at a higher level, cutting into their bottom line.
The suit further alleges that the companies it names as defendants used their market influence to dissuade food line distributors, public school systems and food chains from doing business with EPG. If EPG's business model were to catch on, contends the suit, the polystyrene industry would be pressured into participating in more costly recycling operations.
The ACC's PFPG violated anti-trust laws by "telling participants what they should do or not do regarding matters relating to actual or potential suppliers that might have the effect of excluding them from the market or influencing the business conduct and consumer choice towards them as well as collectively discussing and reviewing prices, costs, capacities, productions, marketing, etc.," according to the suit.
Additionally, it claims that the ACC has deliberately sought to spread disinformation on the viability of polystyrene recycling, further damaging EPG's business.
"ACC/PFPG leadership and members continued from June 2007 – January 2009 with false and deceptive advertising to schools, distributors, state officials and consumers that recycling of food service foam polystyrene was not economically feasible, knowing full well after reviewing EPG's costs of operations, waste audits, business method and financials that this was not factual," reads the suit.
EPG says its recycling system for polystyrene is viable and has 10 fully commercialized facilities, which have needed about $1 million in startup capital. However, the suit contends that EPG needs participation from the market's giants to realize its full potential.
It brings up several specific incidents that it claims harmed its business. According to the suit, in 2004, Sodexo, a company that provides food service, and EPG agreed on a contract to test market its recycling model in various school systems. It claims that Pactiv refused to deal with Sodexo on any matter pertaining to EPG, harming the venture. Additionally, it alleges that Dolco, a maker of foam egg cartons, broke off a business deal with EPG after being pressured by the ACC.
"The plastics foodservice industry strongly supports recycling that is sustainable, economical and environmentally responsible. Since 1990, the broad plastics industry – including the plastics recycling value chain – has invested significantly to increase recycling and educate communities in the United States about recycling," reads a statement from the ACC in response to the suit. "We believe these allegations are without merit, and ACC’s Plastics Foodservice Packaging Group intends to vigorously defend against these wildly imaginative, but baseless, claims."
Resin Pricing - Recycled Plastics
For June 2, 2011
| |  TPE Resin Market Prices (US$/pound)
| June 2, 2011 | | |
| Resin Name | Low | High | Average | | LLDPE - Film | 0.770 | 0.860 | 0.815 | | PP Homopolymer - Inj | 0.860 | 0.990 | 0.925 | | PP Copolymer - Inj | 0.900 | 1.030 | 0.965 | | LDPE - Inj | 0.780 | 0.780 | 0.780 | | HDPE - Blow Mold | 0.750 | 0.760 | 0.755 | | HMWPE - Film | 0.755 | 0.780 | 0.768 | | HIPS | 0.980 | 0.980 | 0.980 | | LLDPE - Inj | 0.770 | 0.770 | 0.770 | | LDPE - Film | 0.800 | 0.960 | 0.880 | | HDPE - Inj | 0.730 | 0.790 | 0.760 | | GPPS | 0.900 | 0.900 | 0.900 |
| | | North American Recycled Plastics Prices (US cents per pound) for June 2, 2011 | | |
| Resin/Grade | Clean regrind or flake | Pellets | | ABS | | Mixed colors, industrial | 68-74 | 80-86 | | POLYCARBONATE | | Clear, industrial | 81-91 | -- | | Mixed colors, industrial | 75-85 | 84-95 | | HDPE | | Natural, post-consumer | 56-62 | 68-74 | | Mixed colors, post-consumer | 48-56 | 56-62 | | Mixed colors, industrial | 46-54 | 54-60 | | HMW-HDPE film, post-consumer | -- | 27-31 | | LLDPE stretch film | -- | 27-31 | | Clear, post-consumer | -- | 33-39 | | Colored, post-consumer | 21-25 | 27-31 | | PET BOTTLES | | Clear, post-consumer | 66-74 | 78-84 | | Green, post-consumer | 52-60 | 60-66 | | POLYPROPYLENE | | Industrial | 69-75 | 79-85 | | POLYSTYRENE | | Industrial | 58-63 | 73-89 | | High-heat crystal, post-consumer | 44-50 | 58-64 | | PVC | | Clear, industrial | 35-43 | -- |
Prices are in U.S. cents per pound for prime resin, unfilled, natural color, FOB supplier, unless otherwise indicated.
Prices are generated from interviews with North American buyers and suppliers. The information provided is based on sources believed to be reliable but its accuracy or timeliness is not guaranteed and no warranties of any kind are provided. |
| | | Chinese Market Prices for Scrap Plastics (RMB/Ton) | Exchange Rate: 1RMB=0.1539USD JUNE 2, 2011 | | |
| Name | Zhejiang | Guangdong | Shandong | | Clear PET Flake | 7900-8500 | 7700-8300 | 8300-8800
| | Green PET Flake | 6900-7400 | 7000-7500 | 6900-7400 | | HDPE Clear Film (high grade) | 5700-6000 | 5700-6000 | 5500-5800 | | Shred HDPE film | 4800-5000 | 4700-4900 | 4700-4900 | | Shred HDPE | 5800-6300 | 5700-6200 | 5600-6100 | | Mixed Rigid PVC Regrind | 4500-4800 | 4400-4700 | 4200-4500 | | Black Flexible PVC Regrind | 4400-4600 | 4200-4500 | 4300-4500 | | LDPE Shred Film | 4800-5000 | 4700-4900 | 4700-4900 | | LDPE/PA Complex Film | 3900-4200 | 3900-4100 | 3800-4000 | | Clear PP Regrind | 10400-10900 | 10200-10700 | 10300-10800 | | Unicolor PP Regrind | 7400-7800 | 7200-7600 | 7400-7800 | | Mixed PP Regrind | 5500-6000 | 5300-5800 | 5400-5900 | | Black PS Regrind | 6100-6300 | 5900-6100 | 5800-6000 | | White PS Regrind | 7000-7300 | 7100-7400 | 7100-7400 | | Clear PC Regrind | 21100-21600 | 21100-21600 | 21100-21600 | | Mixed Colored PC Shred | 9800-10300 | 9800-10300 | 9800-10300 | | ABS Colored Regrind | 7300-7800 | 7300-7800 | 7000-7400 | | ABS White Regrind | 12300-13000 | 12300-13000 | 12100-12800 |
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LDPE
Today, the trading situation of LDPE handpiece was normal. With stable market supply, goods- holders offered high. However, downstream buyers mainly purchased on demand with little enthusiasm because of low need. Latest price: colored LDPE handpiece 3600-3800 yuan/ton.
HDPE
Today, the domestic prices of HDPE scrap stayed high due to the tight stockpile. Along with the unfavorable performance of market speculation sentiment, the international raw oil and linear futures continued to slump. As a result, the market would see a decline in offers. Latest price: HDPE injection block 6400-6600 yuan/ton.
PVC
Today, domestic market of PVC scrap went well because of some promising enterprises, among which several ones offered even higher prices. The sharp decline in futures caused traders to hold watching attitude with obvious reverse in trading volume. Downstream enquiries were scarce and trading situation was insipid. Latest price: PVC plate 3000-3500 yuan/ton.
PS
Today, market mood of domestic PS scrap was calm characterized by stable prices and little volatility. The resource shortage in the market left little room for operations. Downstream buyers purchased on their own demand. As a whole, the trading volume was limited. Latest price: PS television enclosure regrind 6000-6500 yuan/ton.
PET
Today, domestic market of PET scrap went stable as compared to yesterday. Though market supply was fair, downstream demand was not strong. There existed narrow profit margins in real transactions, but the trading volume was not positive. The watching attitude was prevalent. Latest price: transparent PET film in bale 6500-7000 yuan/ton.
PP
Today, dragged by rebounding raw oil price, domestic PP prices were cutdown once again. Goods -holders presented obviously the reluctance to sell out, and if they sold, they only targeted the regular customers. Although buyers made active enquiries, the market sentiment was not vigorous. Latest prices: PP ton bag particle 7000 yuan/ton, PP salt water bag regrind 9000 yuan/ton.
ABS
Today, domestic prices of ABS scrap remained the same as compared to yesterday. Most import buyers held watching attitude. With sufficient stockpile, the trading situation was fine. However, downstream manufacturers had little demand and the real transaction largely lied in the low level resources. Latest price: shred ABS computer enclosure 7200-8600 yuan/ton.
PMMA
Today, domestic market of PMMA scrap performed normally and relatively better than previous days within this week. With downstream buyers purchasing on demand and goods-holders making active shipment, the overall trading situation was favorable. However, the dealers held watching attitude toward the later market. Latest price: clear shred&unicolor PMMA 9500 yuan/ton.
1RMB=0.1538USD
Plastic Markets Snapshot
After seeing resin prices move higher in 2010 by about one-fifth, plastics buyers and sellers report that resin pricing heated up at the start of the new year, slipped as spring approached, but has since rebounded to a sharply higher level.
Polyethylene pricing flattened out in December, forcing prime resin producers to move their proposed five-cent-per-pound increase to January. They had already nominated a six-cent increase for the first month, so struggle occurred in the marketplace over the 11-cent price increase attempt, with buyers saying no. Resin makers then nominated a five-cent price increase for February, only to be met with continued buyer resistance, which continued into March. However, a fire at a natural gas liquids storage facility in Texas severely affected ethylene production in late February, putting added pressure on the market. Thus, resin producers were able to get three cents more per pound in February, plus two cents more in March. Producers then nominated and attained a six-cent-per-pound increase for April.
With resins sales expected to grow more than four percent this year and with plastics production facilities operating at above 90 percent, PE prices are expected to remain fairly high.
After moving up by three cents per pound in December, the polypropylene market at the first of the year was dominated by a severe shortage of monomer, exerting added and extreme price pressure on plastics buyers. When Dow, Shell and Conoco Phillips propylene plants on the Gulf Coast took unexpected maintenance downtime, plastics makers encountered a surge in monomer pricing, with polymer-grade propylene moving up by 17 cents per pound or more. This led resin makers to get between 15 cents and 20 cents per pound more at the first of the year.
This resulted in an increase in output and a reduction in orders by plastics processors. Pricing was volatile but buyers were able to push for price relief, with prices then dropping. The value of PP declined five cents per pound in March, although producers said they’d try to push prices up in April. When monomer prices surged in the third month, spot prices rose dramatically and resin makers then posted price increases of about ten cents per pound for April. Industry members suggest that this price increase will be reached.
As with other resins, PVC producers were able to push prices up in March by about three cents per pound. Resin makers then sought an additional four cents per pound in the fourth month, and at least one producer wants an additional five cents in May. Although domestic PVC consumption remains weak due to weak sales to the construction industry, export demand remains healthy.
Silgan Holdings buys Graham Packaging
Consumer good packaging giant Silgan Holdings, Inc. has announced it will purchase Graham Packaging Co. for approximately $4.1 billion. Graham is one of the top packaging producers in the world, is a major consumer of recycled plastic and operates an HDPE bottle reclamation plant in York Pennsylvania.
Conditions of the merger were released April 13, indicating that Graham shareholders will receive 0.402 shares of Silgan common stock and $4.75 in cash for each owned share of Graham common stock. Based on Graham's closing price of $19.56 per share on April 12, this represents an added value of approximately 17 percent. The sale was unanimously recommended and approved by the Graham Board of Directors and is expected to complete in the third quarter of 2011, pending approval by Silgan's shareholders.
Once finalized, the combined company is anticipated to have annual sales in excess of $6.2 billion and will employee over 17,000 personnel at 180 facilities worldwide.
US PVC Continues Relentless Increases Worldwide |
American PVC offers have been emerging at noticeably higher levels in many global markets including Turkey, Egypt, Italy and China, tracking a similar trend with March.
In a weekly comparison, prices for American PVC to Turkey are $65-95/ton higher. Furthermore, players in Turkey report hearing American PVC prices at least $40/ton above the current levels.
In Egypt, following a trader who sold out his American PVC cargoes in the import market with increases of around $20/ton week over week, new offers for this origin have started to show up even higher for new shipments, pulling the high end of this week’s American offer range up by $78/ton on CIF Alexandria, cash equivalent basis. Buyers also confirmed that the newly emerged prices indicate significant increases compared to the previous levels, attributing this situation to the ongoing repercussions of the Japan earthquake which caused VCM supplies and PVC availability in turn, to tighten across Asia, paving the way for higher PVC prices out of America. A trader in Egypt expects to see further increases on American PVC as some of his suppliers are already pronouncing higher export offers out of the country.
Higher done deal levels in Asia for US PVC are confirming players’ comments. According to reports from China, American PVC sellers also raised their April prices to China by $20/ton from the March done deal levels following last month’s $70/ton increases.
Higher US PVC prices were also seen in Italy, where a significantly higher import US offer showed up this week after a period of absence. According to a trader, American suppliers are not able to offer PVC to Italy and North Europe this month as their prices have reached very high levels while European PVC sellers are keeping their prices at relatively competitive levels considering the Easter holiday will shorten the working month.
An American k67-68 offer seen in Italy this week for April shipment cargoes indicates a large increase of $100/ton (€71/ton with the recent parity) over March, according to a buyer who received this offer. After adding all applicable costs, this import k67-68 offer is standing at a level outside the Italian market, where local prices are available at least €100/ton lower for this grade.
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In Asia, despite the softer feedstock costs, PET producers continue to show a determined attitude regarding their firm PET pricing policy, pointing to the still strong oil prices, hovering above $100/bbl. They also point to their tight operating margins as another reason for their resolute stance.
In feedstock news, spot PTA prices lost $10/ton and MEG prices retreated by $30/ton on CFR China basis when compared to the beginning of March. Meanwhile, PX offers, which gained $20/ton on a week over week basis, still indicate a slight softening of $5/ton with respect to early March. However, the recent earthquake which happened in Japan on March 11th, caused supply concerns regarding PX. This situation could boost spot prices once again.
In the export market, Korean PET producers’ offers gained $10/ton at the low end while they remained unchanged at the high end on FOB Busan, cash basis. Meanwhile, players comment that offers are mostly concentrating towards the high end of the range even though trading activities are limited.
In China’s export market, the offer range gained $20/ton at the low end while it remained stable at the high end on FOB China, cash basis. Despite the buyers’ reluctance to engage in trading activities, sellers appeared adamant on their prices. Buyers’ buy ideas are mostly standing $30-40/ton below the current export offer range. Therefore, most traders elect to trade on back-to-back basis, trying to avoid building stocks.
Inside China, the local offer range moved up by CNY100/ton ($15/ton) at both ends of the overall price range on a week over week basis. Within the range most producers preferred to maintain their prices given the weakened buying interest since buyers feel hesitant to make fresh purchases as they lack a clear view regarding the future direction of the market. However, many producers point to the fact that they are still offering below their theoretical production costs and therefore, they are not willing to offer discounts even for the sake of speeding up their sales.
Considering the fact that PET producers are reluctant to offer discounts from their offer levels, highlighting that their production costs are at break-even point, PET prices are likely to follow a stable trend at around the current levels over the short term while the earthquake in Japan could strengthen sentiment in the region |
China Scrap PET Market Weekly Review (Jan. 10th-14th)
The upstream PET market was stable and some sellers raised prices. Close to the New Year, the trading atmosphere was sluggish and was hard to improve. PET chip was priced higher and turnover was flat.
PET flakes: PET flakes (mixed with a small number of marks and caps) 5,800-6,200 RMB/T, down by 200 RMB/T; PET green flakes 4,800-5,300 RMB/T, down by 200 RMB/T;, PET blue flakes 5,100-5,700 RMB/T, down by 200 RMB/T; PET three-color flakes 4,600-5,100 RMB/T, PET variegated flakes 4,400-4,900 RMB/T.
PET clean flakes: PET clear clean flakes (no label, no cap) 7,900-8,400 RMB/T, up by 100 RMB/T; PET blue clean flakes 7,100-7,700 RMB/T, PET green flakes 6,800-7,300 RMB/T, higher by 200 RMB/T.
PET sheet, film: PET transparent blister sheet 7,500-8,100 RMB/T, PET film 4,100-5,600 RMB/T, PET transparent film with a film 7,700-8,100 RMB/T, PET printed film reel 4,700-5,200 RMB/T.
Other materials: PET clear fibers 7,400-7,900 RMB/T, PET white silk waste 6,800-7,300 RMB/T, PET white non-woven 5,900-6,500 RMB/T, PET clean bottles 6,100-6,600 RMB/T, PET blue and white bottles 5,700-6,200 RMB/T, PET green bottles 5,000-5,800 RMB/T, PET clear embryos 7,400-7,800 RMB/T.
(1RMB=0.6215USD)