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IHS CHEMICAL

Market Advisory Service

Global Plastics & Polymers Polyolefins Weekly

07 July 2017 | Issue 279

ihs.com/chemical

North America

North America Spot Pricing

Week Ending: July 07, 2017

 

Range$/Ton

RangeCts/lb

This WeekAvg.

Last WeekAvg.

Change

LDPE, Spot Domestic GP Film, FOB Houston, railcar LLDPE, Spot Domestic Butene Film, FOB Houston, railcar HDPE, Spot Domestic Blow Molding, FOB Houston, railcar PP, Spot Domestic Homopolymer IM/Fiber, FOB Houston, railcar

1389 – 1433 1279 – 1323 1235 – 1279 1080 – 1124

63.00 – 65.00 58.00 – 60.00 56.00 – 58.00 49.00 – 51.00

64.00

64.00

0.00

59.00

59.00

0.00

57.00

57.00

0.00

50.00

50.00

0.00

LDPE, Spot GP Film, DAP Laredo, railcar LLDPE, Spot Butene Film, DAP Laredo, railcar HDPE, Spot Blow Molding, DAP Laredo, railcar

1124 – 1168 1058 – 1102 992 – 1036

51.00 – 53.00 48.00 – 50.00 45.00 – 47.00

52.00

52.00

0.00

49.00

49.00

0.00

46.00

46.00

0.00

Notes:

Prices are freight adjusted to an FOB Houston basis. Spot Prices, as discovered by IHS, are recorded from the prior reporting date through the time of current publication. Price range indices represent the numeric average of transactions in North America and are not adjusted for volume. Prices represent prime grade material in hopper car volumes; hopper car volumes range from 180,000 to 210,000 pounds. Postings in the 2nd half of the month may also include deliveries for the following month. Grey shading represents a notional price, indicating a lack of reported transactions where price defaults to a numeric average of bids and offers.

North America Polyethylene Market Overview

• The spot polyethylene (PE) market was quiet this week with several market participants away for the July 4th holiday, but new upward pressure on PE prices has also stagnated purchases as buyers evaluate current offers in the market.

• The spot export market was also quiet this week now that prices have stabilized and buyers have returned to a cautious stance.

• Supply of some high-demand grades such as Injection Molding HDPE continues to put pressure on prices of these products, while others are on a steadier trend.

North America: HDPE Blow Molding Spot Pricing 70 60 50 40 30 20 10 06/09/17
North America: HDPE Blow Molding Spot Pricing
70
60
50
40
30
20
10
06/09/17
06/16/17
06/23/17
06/30/17
07/07/17
HDPE - Blow Molding
Non-Integrated Cash Cost (Spot Ethylene)
Integrated Cash Cost (Weighted Avg. Ethylene Cost)
Source: IHS
© 2017 IHS
Cents Per Pound
Cash Cost (Spot Ethylene) Integrated Cash Cost (Weighted Avg. Ethylene Cost) Source: IHS © 2017 IHS

IHS Chemical | Global Plastics & Polymers Polyolefins Weekly

• Spot ethylene prices have been on a steady declining trend over the past few weeks, pointing toward lower PE operating rates, and hence the current tight supply scenario.

• Accordingly, producer price increases for this month remain under consideration, although buyers are showing resistance to higher prices ideas.

• Westlake also recently announced its intention to increase the price of all its PE products by 3 cents per pound (cpp), effective 1 August and rescinding all previously announced increases.

North America: LLDPE Butene Spot Pricing 70 60 50 40 30 20 10 06/09/17 06/16/17
North America: LLDPE Butene Spot Pricing
70
60
50
40
30
20
10
06/09/17
06/16/17
06/23/17
06/30/17
07/07/17
LLDPE - Butene
Non-Integrated Cash Cost (Spot Ethylene)
Integrated Cash Cost (Weighted Avg. Ethylene Cost)
Source: IHS
© 2017 IHS
Cents Per Pound
North America: LDPE GP Film Spot Pricing 70 60 50 40 30 20 10 06/09/17
North America: LDPE GP Film Spot Pricing
70
60
50
40
30
20
10
06/09/17
06/16/17
06/23/17
06/30/17
07/07/17
LDPE - GP
Non-integrated Cash Cost (Spot Ethylene)
Integrated Cash Cost (Weighted Avg. Ethylene Cost)
Source: IHS
© 2017 IHS
Cents Per Pound

North America Polypropylene Market Overview

• PP prices were flat this week at 50 cents per pound (cpp) on a FOB Houston basis, with many market participants absent due to the holiday shortened week.

• Wide spec prices have been reported near 50 cpp for homopolymer and we have heard multiple reports of spot prime bulk trucks being sold near 60 cpp as spot offers have been greatly reduced in recent weeks.

• On 5 July Braskem announced its intent to increase PP prices 5 cpp above the change in propylene monomer from August to September. On 7 July Pinnacle Polymers announced a similar initiative for 3 cpp.

• Both Formosa Plastics and Ineos continue to operate under force majeure.

North America: PP Homopolymer Spot Pricing 60 50 40 30 20 06/09/17 06/16/17 06/23/17 06/30/17
North America: PP Homopolymer Spot Pricing
60
50
40
30
20
06/09/17
06/16/17
06/23/17
06/30/17
07/07/17
Homopolymer - IM/Fiber
Cash Cost (Spot PGP)
Cash Cost (Purified Spot RGP)
Source: IHS
© 2017 IHS
Cents Per Pound

• US Census Bureau shows May imports were 73 millions, split approximately 55/45 between homopolymer and copolymer.

• The July forecast reflects an increase of 1.5 cpp in line with the monomer forecast.

IHS Chemical | Global Plastics & Polymers Polyolefins Weekly

Asia

Asia Spot Pricing

Week Ending: July 07, 2017

 

Range$/Ton

RangeCts/lb

This WeekAvg.

Last WeekAvg.

Change

LDPE, Spot GP Film, CFR China LLDPE, Spot Butene Film, CFR China HDPE, Spot Blow Molding, CFR China PP, Spot Homopolymer IM/Fiber, CFR China

1080 – 1130 1040 – 1070 1000 – 1030 990 – 1010

48.99 – 51.26 47.17 – 48.53 45.36 – 46.72 44.91 – 45.81

50.12

51.03

-0.91

47.85

48.08

-0.23

46.04

46.27

-0.23

45.36

45.36

0.00

Notes:

Spot Prices, as discovered by IHS, are recorded from the prior reporting date through the time of current publication. Grey shading represents a notional price, indicating a lack of reported transactions where price defaults to a numeric average of bids and offers.

Asia Polyethylene Market Overview

• In China, the import market remained subdued this week as most converters were reluctant to carry additional inventories and traders were on the sidelines. The restart of some PE plants following maintenance and the continued weakness of ethylene prices continued to weaken market sentiment.

• Low-priced cargoes were still available in the market after most Asian producers issued their offers for July allocations. Most Iranian producers settled their PE prices on ICIS formula price, while a new Iranian supplier was using one-way pricing to sell its new products at $1,020-1,030 per mt CFR China for LDPE GP film and $960-970 per mt CFR China for LLDPE butene-1 film.

• The Chinese domestic spot market continued to decline this week on the back of deep-sea cargoes. In addition, the fluctuating LLDPE futures hurt market sentiment.

• Demand remained weak as converters were still on the sidelines during the off-season. Market players were paying close attention to the overall inventory level in July. If inventory remains at the low level seen at the end of June and does not rally during the first few weeks of July, this will signal that inventory will continue to decline further in the second half of the month.

• Sinopec and PetroChina rolled over their prices this week.

Asia Polypropylene Market Overview

• In China, the import market was quite quiet this week with prices unchanged amid a lack of offers and bids. PP supply from Asian producers was quite limited as there were no low offers available this week.

• Many re-exporting converters have turned to purchasing PP resin from domestic producers, citing competitive domestic products and stable domestic prices.

• The price premium of impact copolymer over homopolymer narrowed to zero from the normal level of $50-60 per mt amid long supply of impact copolymer and the fact that there is no re-exporting demand for impact copolymer, while there is for homopolymer.

• The domestic PP market was stable this week as some re-exporting converters purchased domestic products. Market players perceived that there was not much room for domestic PP prices to decline as there is no supply pressure until

2018.

• The rallying crude oil prices and strong PP futures on the Dalian Commodity Exchange spurred market sentiment. In addition, the continued decline of China’s inventories and the expectation of economic improvement in China increased market players’ confidence.

• Sinopec and PetroChina rolled over their prices this week.

IHS Chemical | Global Plastics & Polymers Polyolefins Weekly

West Europe

West Europe Spot Pricing

Week Ending: July 07, 2017

 

RangeEuro/Ton

Range$/Ton

This WeekAvg.

Last WeekAvg.

Change

LDPE, Spot Domestic GP Film, Delivered, West Europe LLDPE, Spot Domestic Butene Film, Delivered, West Europe HDPE, Spot Domestic Blow Molding, Delivered, West Europe PP, Spot Domestic Homopolymer, Delivered, West Europe

1200 – 1220 1120 – 1140 1080 – 1100 1080 – 1100

1364 – 1386 1273 – 1295 1227 – 1250 1227 – 1250

1375

1382

-7

1284

1315

-31

1239

1270

-31

1239

1247

-8

Notes:

Delivered indicates product arrival at converter plant Exchange Rate: 0.88 Euro per USD Conversion: $22.046/ton equals to 1 cent per pound Spot Prices, as discovered by IHS, are recorded from the prior reporting date through the time of current publication. Grey shading represents a notional price, indicating a lack of reported transactions where price defaults to a numeric average of bids and offers.

West Europe Polyethylene Market Overview

• Monomer prices for July dropped by €50 per mt in the final settlement, marking the second consecutive month with a drop in ethylene price.

• Supply across Europe is currently good with only minor production hiccups reported.

• Based on our assessment, prices will shed some margin in July, although the decrease will not be significant.

• Meanwhile, spot prices should recede as supply eases, but it is expected to be an interesting month as there are signs that demand could be better than the seasonal norm, based on contract settlements. However, buyers are going to be circumspect until they feel that prices have hit their perceived fair bargain level.

West Europe Polypropylene Market Overview

• A settlement has been made for July propylene at minus €50 per mt.

• Buying sentiment in July is expected to remain unchanged compared to June and prices are likely to fall more than the monomer.

• Supply of PP has been on the longer side of balanced, and unless there are large-scale outages in July, PP availability will not be a factor that will drive margins higher.

• The arbitrage gap for Middle Eastern producers favors Europe strongly over Asia and this will help to support imports in the coming weeks. The additional supply from outside Europe will help support buyers in their aspirations to lower prices more than the monomer, with a decline of perhaps €10-20 per mt more than the monomer drop.

IHS Chemical | Global Plastics & Polymers Polyolefins Weekly

World Spot Prices

Global LDPE GP Film Spot Pricing 70 1,542 65 1,432 60 1,322 55 1,212 50
Global LDPE GP Film Spot Pricing
70
1,542
65
1,432
60
1,322
55
1,212
50
1,102
45
992
06/09/17
06/16/17
06/23/17
06/30/17
07/07/17
North America
West Europe
CFR China
Source: IHS
© 2017 IHS
Cents Per Pound
Dollats Per Metric Ton
Global HDPE Blow Molding Spot Pricing 65 1,432 60 1,322 55 1,212 50 1,102 45
Global HDPE Blow Molding Spot Pricing
65
1,432
60
1,322
55
1,212
50
1,102
45
992
06/09/17 06/16/17 06/23/17 06/30/17 07/07/17
North America
West Europe
CFR China
Source: IHS
© 2017 IHS
Cents Per Pound
Dollars Per Mertic Ton
Global LLDPE Butene Spot Pricing 65 1,432 60 1,322 55 1,212 50 1,102 45 992
Global LLDPE Butene Spot Pricing
65
1,432
60
1,322
55
1,212
50
1,102
45
992
06/09/17
06/16/17
06/23/17
06/30/17
07/07/17
North America
West Europe
CFR China
Source: IHS
© 2017 IHS
Cents Per Pound
Dollars Per Metric TOn
Global PP Homopolymer Spot Pricing 65 1,432 60 1,322 55 1,212 50 1,102 45 992
Global PP Homopolymer Spot Pricing
65
1,432
60
1,322
55
1,212
50
1,102
45
992
40
882
06/09/17
06/16/17
06/23/17
06/30/17
07/07/17
North America
West Europe
CFR China
Source: IHS
© 2017 IHS
Cents Per Pound
Dollars Per Metric Ton
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