The Chicago Plastics Exchange said domestic demand in the spot resin Market slowed last week as new prices were asking for more, but strong exports again brought volume to a stable level. Some special discounts on commodity grades in the domestic market – suppliers still have tram orders that need to be disposed of by the end of the month, helping to transport some materials, but despite one-time transactions, the overall pricing of PE and PP remains stable.
After an increase of $0.03/lb in September, the PE contract price in October was basically flat. In case of severe supply interruption or market shock, the price increase of $0.04/lb is still under consideration. The PP contract price rose 1 cent in September, but then the single contract price fell 0.02 USD / pound in October. The increase in exports continues to cause congestion in Houston’s transport network, resulting in a large build-up of rail vehicles waiting to be packed. These delays have led to an increase in the price of packaging materials.
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The spot PE market has done quite well in one week, but it’s a tough fight. Only healthy export sales can boost weak domestic demand. In the past few weeks, domestic asking prices have risen slightly to better align with the US $0.03/lb contract increase implemented in September. However, processors have begun to prepare for reduced year-end inventory, so orders have been calculated and quantities minimized as needed. As a result, trading was challenged and supply then squeezed to achieve competitive pricing, tightening trading margins last week. September’s 3 cents / pound gain was solid, and the $0.04/pound nomination for October was postponed to November. As the rest of the world continues to use the U.S. market for reasonably priced discounted materials, exports remain active. According to the plastics exchange, if participants are willing to work alone, there will be a large amount of incremental preparation to be transferred through this channel.
Spot PP trading is good, but not special, PP Homopolymer and PP copolymer prices closed flat this week. While the supply of these two types of materials is generally sufficient, the market should not be classified as severely oversupplied because it requires skilled search to match the right supply with the spot demand. Completed deals tend to be trucks rather than railroad cars and copolymer PP. In its weekly report, the plastics exchange wrote that in the past week, traders in our market have been more active in buying goods than processors. Although the PP contract fell 0.02 USD / lb this month, the price of spot materials has been greatly discounted, so the trading price of resin exchange has actually stabilized to a lower level, because these levels are moving towards convergence.
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