Volume Resin Prices Set to Keep Climbing in 2021

Photo: Danimer Scientific

Industry experts predict that the upward trend in volume resin prices will persist into 2021. Key drivers include escalating feedstock costs, production outages that tighten supply, and robust domestic and export demand across most resins—except polystyrene. Some producers, notably in polypropylene, are also seeking margin expansion beyond feedstock price increases.

These insights come from seasoned analysts at Resin Technology, Inc. (RTi), senior editors at PetroChemWire (PCW), and CEO Michael Greenberg of The Plastics Exchange.

PE Prices Rise Steadily

Polyethylene (PE) prices surged 5¢/lb in December, bringing total 2020 inflation to an unprecedented 24¢/lb. Suppliers signaled 3–5¢/lb hikes for January. RTi’s VP Mike Burns, PCW editor David Barry, and Greenberg note that depleted end‑of‑year inventories are pushing non‑contract buyers into higher-priced spot markets. While demand is expected to moderate as processors draw down stocks, PE pricing may remain elevated throughout the first quarter.

Greenberg described spot trading as “remarkable” not for volume but for the price premium driven by scarcity. Factors include sustained domestic and export demand, new production units coming online, and a significant shutdown at Braskem Idesa that amplified export demand.

PP Prices Spiral Higher

Polypropylene (PP) saw a 14¢/lb jump in December, with 10¢/lb linked to rising propylene monomer prices and an additional 4¢/lb aimed at boosting supplier margins. January monomer contracts are projected to rise another 5–6¢/lb, while suppliers seek further 5–6¢/lb spot price increases. RTi’s VP Scott Newell and PCW’s Barry anticipate PP prices staying high into the first quarter, with a potential correction toward quarter’s end.

Domestic demand outpaced supply in Q4 by 9–10%, driven by consumer packaging, rigid goods, and automotive sectors. Despite high prices, import volumes are expected to grow in Q1 and Q2 as domestic PP becomes more expensive. The domestic PP premium over Asian prices has not been seen since 2018, limiting the ability to import lower‑priced resin.

PS Prices Increase Again

Polystyrene (PS) prices rose 6–10¢/lb in December, driven solely by higher benzene, styrene monomer, and butadiene costs. A 5¢/lb increase for January is already in place from at least one supplier. RTi’s VP Robin Chesshier and PCW’s Barry foresee further modest increases in January if benzene contracts rise 5–7¢/gal, with a potential softening in February as spot benzene prices decline. Demand remains weak except for high‑impact polystyrene (HIPS) used in appliances.

PVC Prices Hold Steady, Slight Upward Pressure

PVC prices were flat in December despite a 3¢/lb push from suppliers. A 4¢/lb hike is being considered for January, with a further 3¢/lb proposal for February. RTi’s VP Mark Kallman views the January increase as a 50‑50 proposition, dependent on export demand and domestic production levels. Kallman suggests the February increase is strategic, ensuring the January hike is realized. PCW’s Donna Todd notes buyers question the justification for a 7¢/lb increase, citing ongoing contract negotiations and a market that had been expected to soften.

PET Prices Remain Firm

PET prices held steady at 50–55¢/lb for spot railcar and truckloads into 2021, with contract rates in the high‑40s to low‑50s. Feedstock costs for PTA and MEG are expected to settle higher for December contracts, supporting stable resin prices for buyers linked to monthly indices. PCW’s Xavier Cronin projects February spot prices to rise 2–4¢/lb if bottle demand remains steady, while imported PET may see minor price reductions.

Despite a post‑COVID surge in domestic PET bottle demand, U.S. imports remained elevated throughout 2020, mitigating pressure on U.S. producers and keeping prices anchored.