Commodity Resin Prices Surge, Yet Polypropylene Prices Drop

Photo: Covestro

Supply constraints and persistent demand have pushed polyethylene (PE), polystyrene (PS), and polyvinyl chloride (PVC) prices higher once again, while polypropylene (PP) has seen a sharp decline. The dip in PP prices followed an almost 20¢/lb drop in propylene monomer costs, and suppliers subsequently trimmed their non‑monomer margins.

Industry experts from Resin Technology, Inc. (RTi), PetroChemWire (PCW), and the CEO of The Plastics Exchange predict that inventory recovery will smooth out price volatility for the largest-volume commodity resins—except PP, where the market remains tight.

PE Prices Surge Again

PE contracted at a 7¢/lb increase in March, with suppliers signaling another 7¢–9¢ rise for April. Mike Burns, RTi’s VP of PE markets, and PCW senior editor David Barry echo this view, noting that since the 2020 low, contract prices have climbed 43¢/lb—about 19¢ of that jump occurring in early 2021. Spot prices have outpaced contract gains, rising an additional 10¢/lb, especially after the mid‑February Gulf storm.

Experts anticipate a more stable period later in the month as suppliers replenish inventory lost during the February storm. Burns predicts May will return to normalcy but warns that significant price relief may not materialize until after September. He highlights the impact of transport costs, noting that processors are now paying nearly twice the railcar price of a year ago. “Large retailers have absorbed much of the cost, but smaller businesses are reaching a breaking point,” he adds.

Barry expects ethylene monomer prices to start falling in April, potentially triggering PE price corrections in May or June. He forecasts spot price declines and a flat pricing scenario for May–June, contingent on demand. Global PE prices are beginning to soften, and North American suppliers will need to re‑enter the export market, which now accounts for over 30% of production, potentially forcing further price adjustments.

PP Prices Ease Slightly

PP prices fell 12.5¢/lb in March, following an 18.5¢/lb drop in propylene monomer contracts and a 6¢/lb margin increase by suppliers. A second 6¢/lb margin hike was announced for April, independent of monomer changes.

Greenberg, Barry, and RTi’s PP markets VP Scott Newell all anticipate another decline in April monomer contracts, possibly another double‑digit drop. Newell describes the market as a “Wild West” for monomer prices, similar to the pre‑February freeze period. He warns that PP suppliers will need to operate at the low 90th percentile capacity for the remainder of the year to meet demand, but monomer production may lag, keeping prices elevated.

Both Newell and Barry estimate that PP suppliers must rebuild approximately 800 million lb of inventory to stabilize the market. While plant operating rates dipped to around 70% in March, 75–80% of resin production units had restarted, though not at full capacity. Newell notes, “We have a long road ahead as inventories fall across the entire supply chain.”

Despite steep PP price hikes, demand remains robust. Barry reports that imports are expected to increase over the next 30 days, but volumes are insufficient to shift the overall supply‑demand balance. Greenberg notes that the spot market is absorbing the shortfall, keeping spot prime resin prices high.

PS Prices Climb Again

PS contracted 9¢/lb in March, with suppliers announcing another 9¢ increase for April. This marks the sixth consecutive month of price hikes for PS, according to PCW’s Barry and RTi’s VP of PE, PS, and nylon 6, Robin Chesshier. Demand remains solid, adding pressure on already tight supplies.

Feedstock costs underpin the price rise, with benzene contracts approaching $3/gal and styrene monomer hitting record levels of 85¢/lb. Chesshier cautions that feedstock prices could fall just as quickly, potentially as early as this month, as global prices ease.

Barry predicts a significant price correction for styrene monomer once three Houston‑area plants restart, though it may take 2–3 weeks for the new supply to reach downstream PS plants. The forward curve for benzene is trending downward, which could stabilize prices. However, Ineos Styrolution’s force majeure status remains in effect for April, leaving allocation levels uncertain.

PVC Prices Rise

PVC contracted 7¢/lb in March, following cumulative 7¢ increases in the preceding two months. Suppliers aim for another 7¢ hike in April, and one has issued a 3¢ increase for May, per RTi’s PVC VP Mark Kallman and PCW senior editor Donna Todd. Todd notes that the March hike brought the first‑quarter total increase to 14¢/lb.

Kallman believes the 4¢ hike will likely be implemented in April, but is skeptical about the 3¢ increase for May. He cites tight supply, higher feedstock prices—especially ethylene—and planned maintenance outages that have since been resolved. Nearly all Gulf Coast ethylene crackers disrupted by the February “Big Freeze” have restarted and are ramping up.

Demand remains strong, but there is growing concern about the nearly doubled cost of PVC products for construction. Todd recalls that in her 35‑year career she has never seen two consecutive 7¢ hikes, warning that buyers will prefer uniform price increases to avoid a messy settlement.

PET Prices Rise

PetroChemWire senior editor Xavier Cronin reports that domestic PET prices started April at 70¢–75¢/lb for monthly railcar contracts and spot truckloads, after rising as much as 5¢ through March.

Cronin highlights that PET imports surged 98.9% in January versus January 2020. Buyers able to use non‑U.S. resin are booking imports in the high‑60¢/lb range, delivered at U.S. ports.

He projects domestic PE prices to stay within the 70–75¢/lb range through April, potentially climbing to 80¢/lb in May as seasonal demand for single‑use PET bottles and containers spikes. PET feedstock prices for PTA and MEG steadied at the start of April after a March spike caused a spot shortage in some markets.