Current State of the Plastics Market
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We updated this about every 2-4 weeks. If you would like to receive the updated information by email, please drop us an email or click above, and we will include you on our list. What we try to do is look at plastic pricing, plastic markets, energy pricing, and everything we can related to the price of plastic. We include plastic producer’s increase notices and announcement, plastic market trends, and suggestions about how the current price of plastic will affect your buying decisions. Resin pricing is tough to keep up with, and thermoplastic prices are currently changing. We just try to keep you one step ahead.
This is how we see the market as for March 1st, 2012
Welcome to another State of the Market from TDL Plastics. First off we want to invite you out to NPE next month and encourage you to come by our booth and visit with us for a while. We think that with the way that the world is going and this business has turned in the past 5 years, there is nothing more important than knowing who you are dealing with and who you are getting your information from. We would love the chance to shake hands with everyone so that they can put a face with the name and the company who sends these out every month acting like we know what is going to happen. We are going to be in the North Hall, booth #54066 which means nothing to you now, but just remember that when you are buying a $12 hotdog at the show, turn around and our booth is facing the Food Court. Come on over and talk with a little food in your mouth and mustard on your chin, we don’t mind. Now, onto the last month before the show…
The big thing to watch in our opinion is going to be the Iran/Israel conflict. It is our feeling that this is going to get much worse before it gets better. That being said, we think that the price of oil is going to go up from here, which is going to have multiple effects on our business. Any disruption to the Global oil supply is going to wreak havoc on our business and the stability of pricing, and that is exactly what we think is going to happen.
We are going to see higher feed stock prices, and cost of resin across the board. We are going to see a decrease in demand for parts as the higher prices at the pump and the higher cost of each part take a real toll on the buying power of US consumers. With high oil prices, things like propylene monomer are going to be more valuable being converted into a component of gasoline rather than put into plastic. This means that the price of PP will jump significantly again. We are hoping that there is a peaceful resolution to the situation, but right now, we are definitely betting on the other side of it. But for what is going on now…..
Prices have been going up, up, and up all the way across the board. Seem like we have not seen any let up. Prices on benzene are way up, pushing up all of the styrene based materials; butadiene rubber is way up as well, and all of this will keep pushing up the price of most resins. We have seen increases across almost all major families of resins as everyone is either getting squeezed or putting the squeeze on.
Commodity Materials:
Polyethylene: There has been $.07 per pound increase nominated by most producers for PE pricing in March. This is not due to higher natural gas prices, but a lot of planned turn arounds at plants occurring at the same time, which is going to take a lot of ethylene production out of play for a few weeks. Having such low pricing on natural gas here in the US is allowing PE pricing to stay much lower compared to overseas producers, and US exports of PE have been very strong. We think that the feedstock price will keep PE in check, and not allow it to get too far out of hand while the producers are down, and will allow prices to fall back down. This is going to put PE at yet more of an advantage to PP going into the summer month, and more end users are going to be pushing their parts from PP into HDPE.
Polypropylene: PP pricing has been the big star of the plastics business this year with about $.22 per pound going into effect since the first of the year. This is a huge and unprecedented increase, and many of our customers are a bit shocked by how far it has gone up. We are also hearing Styron is increasing the price of their PP Inspire compounds by $.12 per pound for the US on March 1st.
Polystyrene: All styrene materials are headed up due to the spike in benzene prices, and things like HIPS are getting double hit because of the increase in the cost of rubber. Prices are up from many of the producers $.02 per pound for GPPS and $.04-$.06 per pound on any of the HIPS grades. We do think that these will stick, and we think that the prices are going to continue up as the price of oil rises, and US producers run as much natural gas as they can through their plants.
Engineering Materials:
ABS: Styron is going up $.11 per pound on March 1st for ABS. There are rumors of other domestic producers going up as well $.09 per pound in the middle of March. The only thing firm that we have right now is Ineos going up $.06 per pound on April first for all ABS, and $.04 per pound for SAN and other styrenics that they produce. Benzene, butadiene and acrylonitrile are all up 30-40% so far this year, and it does not look like they will be going down any time soon. Benzene is set to settle out even a little higher this month. Prices on ABS therefore are going to have a strong floor under them this first quarter to first half of the year as demand is strong and producers are running pretty much flat out to meet demand. Buy what you can in deals because we don’t see it falling any time soon.
Polycarbonate: Calibre and Styron’s PC alloys are headed up $.13 per pound for March 1st, and then Sabic threw a $.09 per pound increase out there for Lexan on Optical Media, Extrusion, Compounding, and Bottle grade materials. Bayer is going up $.17 per pound, and we think that most of what they are asking for is going to stick as demand is good, feed stocks are up, and people finally believe that it is going to take something good in the world happening, instead of something bad, to make the market swing down again for PC.
Nylon: Looks like Nylon is following suit with everything else going to in the market. BASF went up $.10 per pound on Nylon 6, and DSM announced $.10 per pound on 6 and 66 for February 1st. We do think that the others are going to follow suit, but have not seen it all yet. All of the materials for building materials for nylon are going up, so we do believe that they are going to stick. We have heard of even more increases out there, but have not seen any more letters. We think that they are on the way though. We will keep you posted.
PVC: Prices for PVC were up about $.03 for January and $.02 for February, and plasticizer for PVC is up $.10 per pound from most of the producers 2/15. This is pushing most of the compounders of PVC to push their prices up $.04-$.05 per pound on rigid, and $.06-$.08 per pound on flexible materials. This is going to stick because they are operating on pretty tight margins right now, and unless there is some back down in pricing for feed stocks (which we don’t see right now), we think that these numbers are here to stay.
Polyurethane: Lubrizol, one of the major players in the TPU market here in the US, has purchased Merquinsa, a Spanish producer. This is more consolidation in an already narrow market, giving end users fewer choices in their TPU supply chain. While this is going to be a good move for Lubrizol, and those using their materials from a more global presence, it may push pricing higher overall for TPU’s.
Soft Materials: All of the styrene and propylene based materials (TPV, SBS, SEBS) are all up because of the hits that they are taking from base feed stock costs. While we have not seen the letters yet, they are usually a bit delayed, and expect them out any time.
From the Plastics Team members who are ready for the pool party that is NPE next month.