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Polypropylene prices rise 2 cents
Updated: 2016-01-05 09:50 Source: Plastics News share:

North American polypropylene resin prices have ended 2015 on the upswing, climbing an average of 2 cents per pound since Dec. 1, as supplies of the material remain tight throughout the region.

The 2 cent hike is the third consecutive monthly price hike, following a 2 cent increase in November and a 3 cent upward move in October. These increases have reversed a trend that had seen regional PP prices fall for three straight months.

Even with these three late-year increases, regional PP prices declined by a net of 11 cents per pound in 2015. Most of that drop stems from a 10-cent January decline, which had followed a similar 10-cent drop in December 2014 as global crude oil prices were crashing.

Some North American buyers reported seeing increases of 3 cents in both November and December, but a greater number reported seeing 2 cents both months. In an email, market analyst Scott Newell said the discrepancy is because “the [PP] market isn’t moving in unison anymore.

“Processors are taking different amounts of increases and/or margin expansion depending on what kind of contract they have, what kind of pricing formulas they have, or what suppliers they are buying from,” said Newell, who is with Resin Technology Inc. in Fort Worth, Texas.

Recent production outages — combined with strong domestic demand — have limited the availability of PP throughout North America. “Polypropylene is sold out,” one buyer in the Midwest told Plastics News. “Producers have complete pricing power.”

Regional PP sales were up 5.2 percent through November, according to the American Chemistry Council in Washington. Domestic growth of 6 percent was lessened by a drop of almost 20 percent in export sales during that 11-month period.

Among individual end markets, regional PP sales into injection molded consumer and institutional products — including furniture and housewares — were up almost 11 percent through November. In that same period, regional PP sales into sheet — including thermoformed packaging sheet — surged almost 10 percent.

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