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 December 20th, 2011
Welcome to another State of the Market from TDL Plastics. It looks like many in the plastics industry have already decided to evacuate for the year. In light of that, this is going to be a slightly shorter than normal State of the Market, due in part to a lot of uncertainty on what is going to happen after the first of the year. As always, we will give it our best shot on what we see coming down the road, and keep you in the know.
The one thing that is really clouding our vision going forward is the ongoing crisis in Europe. About the time that they get one finger into the leaking dam, another country springs a leak. There are talks of credit downgrades on all of those in the EU. This would have very, very far reaching applications to all of us. If the countries debts get downgraded, then the banks that are holding the debts of those countries will have to raise more capital because of the capital requirements that they have, and the downgraded debt will not be as “secure” as it was when they bought it.
If this happens, there will be a severe constriction on capital in Europe. The opinions are mixed on if this would mean recession or depression for Europe. Either way, that is not going to be good for the world economy or for us. The US dollar would continue to strengthen, and oil prices would fall, which would be good, but our exports to Europe would fall, and a whole lot of other contagious effects which could make their way across the pond. We are going to have to wait and see.
Commodity Materials
Polyethylene: Just as we figured would happen, we have seen the PE producers attempt a January increase. They want to go up $.07 per pound on all grades on top of the $.05 that they have been trying to push through since May, which they said went into effect for November, and the $.06 that was supposed to go for December. This would be $.18 per pound for January. With natural gas prices at a 2 year low, ethylene monomer pricing down, and a slight inventory build this month, there is no chance of a $.18 increase in January. We do think that there may be a slight increase at the first of the month as people get back into the office and orders start to stir again, but this is only going to be for a few cents. Going forward, we think that feed stock costs are going to keep PE pricing lower than what producers hope for much of 2012, and this is going to be welcome news for most processors. We also have many of our customers putting jobs into PE versus PP because we believe that the long term pricing of HDPE is going to be below that (even when you look at the specific gravity difference) of PP. This will be something to ponder on your break.
Polypropylene: Producers were trying for a push of $.03 per pound up for December 1st. Contracts ended up settling down a bit for December, but we think that this is just going to be a temporary thing as the market and oil prices are going to push propylene monomer up in 2012. We don’t have a handle on how much yet, but this big slide in the price of PP, relative to where it had been, was based off of the fact that oil temporarily dropped into the high $70’s earlier this fall. Most everyone on our side of the business had thought that PP pricing was going to rebound when oil prices jumped back up to around $100, but it has not happened yet. It will though, so be prepared and give your end users a bit of notice that PP prices should be headed up some time in the first quarter.
Polystyrene: Both benzene and styrene monomer have climbed quite a bit, almost 10%, over the past week, so this is going to translate into higher prices for PS in the first quarter. Producers have come out with $.06 per pound for January, and we think this may not be it. The increase in demand domestically is also going to help the push as depleted inventories are going to have to be rebuilt during the first quarter.
Engineering Materials
ABS: BD rubber jumped $.30 per pound in Asia. This coupled with styrene going up is going to be pushing ABS up in the first quarter. We would not be surprised to see a fresh round of increases from the majors as the US settles out from a bumpy 4th quarter early next year.
Polycarbonate: PC prices softened quite a bit on the spot market in November and December as inventories of higher priced materials were sold off for end of the year count. We have seen a lot of PC sloshing around on the open market, but don’t expect it to stay that way for very long. We would not be surprised at all to see an increase letter or two out there right after the new year in an attempt to slow the erosion in PC prices that has occurred because of the availability of material here during the 4th quarter.
Nylon: Nylon prices have held relatively steady in December and we expect some steadiness in the market going into January. We don’t see any great movements for nylon on the horizon, but we will let you know.
PVC: PVC pricing has been pushed down through the 4th quarter, and we think that the weak demand for PVC is not changing much any time soon. Don’t expect any big moved in PVC coming up through at least January.
Like we said, pretty short and sweet the month, but we want you to have a very Merry Christmas. For those who got our Christmas Card this year, thanks again for putting up with our very bad taste, and thanks for giving us a reason for coming up with different ideas every year. For those who don’t get one, you need to be buying from us so you can see who you are really dealing with.
From the Plastics Team that hope you have a great Holiday season, and have been nice enough to get a visit from the Fat Man.