North American prices for PET bottle resin, polycarbonate and nylon all rose in April, due to strong demand, supply chain issues and operational issues at some plants.
Polyethylene prices, meanwhile, remained stable, but only after lengthy negotiations between buyers and sellers.
PET prices rose an average of 2 cents in April, due to strong seasonal demand. Prices had already risen 27 cents in the first three months of the year. April’s rise was also impacted by tight supply and freight and logistics issues.
Demand for PET typically increases in the spring as beverage companies prepare for higher demand brought on by warmer weather. The two main markets for PET – bottled water and soft drinks – both saw growth in 2021.
Future North American supplies could be enhanced by the completion of a major but much-delayed PET resin and raw materials unit in Corpus Christi, Texas. Materials maker Alpek SAB de CV of Mexico City commented on the project during an April 26 earnings call, saying a decision on the project will be made next month.
Alpek co-owns the site, along with Indorama Ventures of Thailand and Far Eastern New Century of Taiwan, through a joint venture called Corpus Christi Polymers. Each of the JV companies also owns existing North American PET production, including Alpek’s DAK Americas unit. The JV acquired the Corpus Christi site for $1.1 billion in 2018.
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When complete, the site is expected to be the largest single-line, vertically integrated PET resin and PTA raw material manufacturing site in the world and the largest PTA plant in the Americas. The site’s annual PET production capacity will be 2.4 billion pounds, while its PTA production will be nearly 2.9 billion pounds.
Polyethylene prices held steady in April as buyers delayed a 6-cent hike that producers were pushing for. Material prices rose 4 cents in March after being flat for two consecutive months and down 15 cents in the last three months of 2021.
Raw material prices are on the rise and demand is strong, but supply chain challenges have prevented North American PE manufacturers from exporting as much PE as they want.
The export market has taken on increased importance for North American PE manufacturers, as much of the new capacity added over the past decade to use shale gas feedstock has been destined for export markets. .
PE makers are now working on 6-cent increases for May. Some market watchers said May’s move could succeed where April’s attempt failed.
But a recent blog post from Houston-based consulting firm C-MACC indicated that PE makers may still have some work to do.
“Push Polyethylene Increase [from April to May] while raw material costs remain consistently high suggest that [PE makers] are receiving significant customer pushback, and this may reflect large channel inventories,” the post said.
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“The surge in polymer prices at the start of the year was partly driven by supply chain concerns and worries about security of supply, but with demand possibly plateauing, Polymer buyers could feel some of the leverage back in their yard.”
Polycarbonate prices rose 10 cents in April as supplies remained tight amid strong demand. Prices also rose 10 cents in March and are up 29 cents overall so far in 2022.
Sabic’s PC resin plant in Burkville, Alabama, which accounts for about 10% of North American capacity, is restarting after maintenance. But hopes for improved PC supplies were dampened on May 17 when Covestro announced force majeure sales limits for PCs made at its Baytown, Texas factory.
In an email to Plastics Newsa spokesperson for Pittsburgh-based Covestro said an unexpected power and steam outage at the Baytown site in late March was followed by an equipment failure in early May as it attempted to restore post-failure operations.
These incidents “had a significant impact on our ability to produce BPA [feedstock] and polycarbonate,” the spokesperson said. “Despite considerable efforts to resolve production issues since the outage, supply continues to be heavily impacted.”
Prices for nylon 6 and 6/6 resins each rose 5 cents in April. Sources said automotive market demand is improving, although materials continue to face production and logistics issues. Prices for both materials had increased by an average of 40 cents in 2021.