ThePlasticsExchange Market Update June 2nd, 2017

bringing the market to you Resin for Sale 16,200,264 lbs Spot Range TPE Index
The spot resin markets remained active in this past holiday shortened week; month-end fell midweek and
completed volumes were high. Spot supply for most commodity grades of Polyethylene and Polypropylene Resin Total lbs Low High Bid Offer
were available and ample; prime prices were steady across the board, offgrade was weaker. Most PE produc-
ers have conceded a $.03/lb contract decrease for May; several have also rescinded outstanding nominations, HDPE - Blow 2,669,588 $ 0.490 $ 0.560 $ 0.470 $ 0.510
so June contracts will be flat at best. PP contracts declined $.075/lb in May, equal to the drop in PGP monomer
LDPE - Film 2,293,220 $ 0.560 $ 0.650 $ 0.580 $ 0.620
costs; indications currently point to little change, neither up nor down, for June. Incremental high volume ex-
ports have been sluggish, as international resin market sentiment has been neutral to bearish and regional HMWPE - Film 1,865,496 $ 0.500 $ 0.565 $ 0.490 $ 0.530
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MARKET UPDATE

supply quite competitive.

PP Copo - Inj 1,741,288 $ 0.500 $ 0.590 $ 0.510 $ 0.550
The major energy markets fell sharply, highs were seen as trading began on Tuesday with lows made near the PP Homo - Inj 1,685,288 $ 0.490 $ 0.560 $ 0.480 $ 0.520
end of the week. Although WTI Crude Oil recovered almost a buck from its Friday low, the July futures contract
was still down a net $2.14/bbl to $47.66/bbl. August Brent Oil futures lost $2.56/bbl, nearly 5%, to settle Friday LLDPE - Film 1,465,472 $ 0.510 $ 0.595 $ 0.510 $ 0.550
at $49.95/bbl - which kinda seems like a promotional sales price! July Natural Gas futures chunked off a whop- LLDPE - Inj 1,148,460 $ 0.530 $ 0.620 $ 0.550 $ 0.590
ping $.311/mmBtu, nearly 10%, and went into the weekend just below the $3/mmBtu threshold $2.999/
mmBtu to be exact, which is the lowest close since the end of Feb. LDPE - Inj 906,460 $ 0.560 $ 0.635 $ 0.560 $ 0.600
HDPE - Inj 350,644 $ 0.610 $ 0.670 $ 0.590 $ 0.630
Prompt NGL markets were pressured and priced lower. Ethane for June fell almost $.02/gal, to end the week
below $.24/gal ($.101/lb). Propane lost a hefty 7% to close the week at $.61/gal ($.173/lb). Spot Ethylene activ-
ity picked up and the market firmed. Material for June delivery, which had been discounted to May, was marked
higher to $.27/lb, quickly recouping most of that backwardation. The spot Propylene market has yet to re-
awaken and held steady to a penny firmer near $.37/lb. Current spot PGP levels indicate that the 2 nd quarter
break seems to have already run its course, and even points to a slightly higher contract level for June, perhaps
a penny.

Spot Polyethylene trading was busy, there was a flurry of railcar offers into month-end and the offers continued
to flow as June began. There was a good mix of prime and offgrade seen and though prime held steady, the
offgrade discount widened. The material was well received by processors who had been whittling down their
inventories awaiting cheaper prices. Completed volumes were heavily favored towards film grades, including all
HMW, LDPE and LLDPE. Injection grade HDPE remained super snug and all reasonably priced offers were HDPE Blow Molding
quickly snatched up. Some unreasonably priced material went unsold proving that there is a limit to acceptable 1 Year
pricing, even in very tight markets.

Most Polyethylene contracts were down $.03/lb in May and currently sit up a nickel during 2017. The spot Poly-
ethylene market peaked in the beginning of March and except for HDPE Injection, has come down sharply, and
in varying degrees based on product. We normally see some price movement between grades, but the pre-
mium swings in this down cycle have been extraordinary. The Polyethylene markets upward momentum is long
gone and even considering the $.03/lb May decrease, spot PE is transacting at a nice discount to general con- PP Homopolymer
tract levels. There is not a cohesive price increase effort on the table for June and it seems that contracts have 1 Year
room to slide a bit further.

Polypropylene trading activity was pretty good; while there were plenty of buyer inquiries, completed volumes
fell short and below average. Fresh railcar offers have slowed to a trickle; generic prime resin is somewhat
scarce, especially Copolymer, and available offgrade resin is leaning towards lower-end quality. Resellers with
recently purchased inventory have generally raised asking prices a tad, though some with older and lower
priced stocks are still dealing on price, which is a sign that demand has disappointed as pockets of old inven-
tory still remain.

Expectations for another price decrease in June appear to be squashed by firmer monomer costs and tighten-
ing supply/demand dynamics. However, processors continue to scour the market for cheap price levels that we
have not seen for weeks. Upstream inventories are relatively snug and it seems that processors will need to
Michael Greenberg
come back to procure material. We believe there is potential for modest upside ahead in pricing.
312.202.0002 Disclaimer: The information and data in this report is gathered from exchange observations as well as interactions with producers, distributors, brokers and

@ResinGuru
processors. These are considered reliable. The accuracy and completeness of this information is not guaranteed. Any decision to purchase or sell as a result of
the opinions expressed in this report will be the full responsibility of the person authorizing such a transaction. Our market updates are complied with integrity and
we hope that you find them of value. Chart values reflect our asking prices of generic prime railcars delivered in USA. Dominick Russo and Fred Dial Editors
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