In January 2016, Plastics Technology published an article, “All Quite on the Resin Pricing Front-But Watch Out for PP”, written by Lilli Manolis Sherman, Senior Editor which discusses resin pricing heading into 2016. This article reviews the factors like feedstock costs, supply and demand, which affect resin raw material pricing. Some overview of the article is written below, click on the link to read the full article. The information covers raw materials: Polyethyene, Polypropylene, Polystyrene, PVC, ABS, Polycarbonate and Nylons 6 & 66.
PE (Polyethylene) prices were flat in November and were expected to remain so in December despite PE suppliers’ third attempt to push through a 5¢/lb price increase. Industry sources agree that suppliers can be expected to continue to pursue increases in the first and second quarters if the opportunity presents itself. Looking ahead Mike Burns, VP of Clients Services for PE at RTi noted that while strong domestic demand is typically a driver for price increases, weak global feedstock prices, soft global demand and improving supplier inventories will prevent this.
PP (Polypropylene) prices have moved up for 3 straight months, this price movement in the fourth quarter signaled a reversal in PP pricing which had been on a decline through the first three quarters in 2015. “Demand is still strong, operating rates are high, and, the industry is close to running out of resin,” said Scott Newell, RTi’s director of client services for PP.
PS (Polystyrene) - Mark Kallman, RTi’s VP of Client Services for Engineering Resins, PS and PVC stated that PS prices are likely to firm up in this first quarter due to anticipated upward pressure from benzene, as that market has gone from an oversupply to a much more balanced scenario.
PVC domestic demand is not great, but at the same time Asia is oversupplied. Kallman expects the first quarter to be a very busy with a host of ethylene cracker turnarounds which always serves to tighten the market and boost feedstock prices. Kallman said a stronger domestic construction market is largely expected for 2016 but pricing will depend a lot on the global PVC market situation.
ABS prices continued to lower because of lower feedstocks. Kallman predicted mainly flat pricing through much of the first quarter depending on the global oversupply. Domestic demand for ABS, Kallman states was expected to remain healthy, as it was through 2015.
PC (Polycarbonate) domestic demand should remain strong in 2016 as last year, predicts Kallman. He believes that the oversupply will continue as nearly all suppliers plan to expand capacity.
Nylons 6 &66 prices may feel some upward pressure as benzene prices are going up and are expected to continue to do so in the first quarter of 2016 stated Kallman but expects this to be offset by the competitive nature of the current market, despite good domestic demand.
These resin pricing trends are important for a custom plastic injection molder like Crescent Industries. For more information on Crescent Industries services and capabilities, please click here.