We updated this about every 2-4 weeks. If you would like to receive the updated information by email, please drop us an email, and we will include you on our list. What we try to do is look at plastic pricing, plastic markets, energy pricing, and everything we can related to the price of plastic. We include plastic producer's increase notices and announcement, plastic market trends, and suggestions about how the current price of plastic will affect your buying decisions. Resin pricing is tough to keep up with, and thermoplastic prices are currently changing. We just try to keep you one step ahead.
This is how we see the market as for July 29, 2010
Welcome to another edition of TDL Plastics State of the Market. This past month has seen some interesting numbers come forward, such as company profits, and better than expected news on the economy. If you are like us, then you have been busy over the past months, and the world of plastics looks much better than it did just a year ago. We are certainly encouraged by the growth that we have seen in our individual customers lately, and now the industry seems to be running into a bit of a mini-credit crunch as order volume is increasing and cash is getting tight because the OEM’s are taking a while to pay. This too-much-business-too-fast scenario is much better of a problem than what it has been, and we are happy to have it. Hope you are as well.
We have seen a pretty big increase in the numbers of people looking to place work. This is not work moving from molder to molder domestically. This is work that is either being transferred from Asia back to the US, or brand new work. That is a good thing for all of us.
Owens Corning came out with a Force Majeure on their Dry Use Chopped Strand glass fiber. This is going to put even more pressure on the compounded materials as the price and lead times for the available fiber are sure to go up until the other producers can fill the void or Corning can bring that plant back up on line. Time will tell, but we will try to keep you posted.
The good news for the month is that the economy is growing. Most out there who watch the nightly news would not believe so, but things are picking up, and I know that most of you who are in the plastics business would agree. We think that while some sectors are going to take a long time to come back, we are going to see a recovery across the board well through 2011 and 2012. As we move forward in the recovery, consumer sentiment, the thing that drives all of our businesses, will continue to improve, and the plastics industry should just get better.
Commodity Materials
Polypropylene: We have seen the bottom in PP pricing, and there are going to be some increases in price for August, generally about $.04-$.05 per pound. We think that this is due to the producers finally getting back into line with how much material is needed after a slow spring, and demand being up quite a bit for many of the sectors that use PP. We have also seen strength in the energy sector, with prices for oil and natural gas holding in a strong range, and this is giving producers more of an idea on where feedstock costs are going. Spot markets have tightened here at the end of the month, so we expect to see PP trending up for the next month or two at least.
Polyethylene: PE prices are nearing the bottom. Saw them sliding early in the month, but producers have nominated some pretty stiff increases for August 1st. We don’t think that these increases are going to go into effect based off of the recent slide and the current price for ethylene monomer, but rather the producers are trying to stop the bleeding. Going forward we think that we could see some more upward pressure due to demand. As the producers try to get some of the increases, some grades such as LDPE have become almost non-existent on the spot market, and if you can get it, it is for sky high prices. We look for market specific pressure to ease a bit, but do think that we have stopped going down. Buy now, and you won’t get hurt.
Polystyrene: Recent softness in the price of benzene has only slightly helped the pricing in PS this month. We have seen some softness creeping in with prices dropping a couple of cents per pound this month on most grades of PS. We look for this to continue as the summer driving season winds down a bit, and benzene becomes a bit more available. We don’t see any big surprises in the PS market as long as the Gulf stays free of storms. If we get a busy hurricane season like many are predicting, we could see some real spikes in prices of PS till October.
Engineering Resins:
Engineering materials have been suffering from specific chemical shortages. Like we stated above, as the economy has picked up, and with it demand, most producers of chemicals were caught flat footed, and we are seeing problems all up and down the supply chain. We expect the commodity market to be much easier in the 3rd and 4th quarter compared to what we are expecting in engineering materials.
ABS: ABS finally seems to be loosening up a bit as the butadiene scare is becoming more of a memory. Is the market back to normal? No. We continue to see an increase in demand from Asia for ABS taking a pretty good toll on inventory worldwide, but producers have been doing a good job of keeping up. We have seen the domestic material loosen up just a bit as well. This is going to push pricing down a few cents per pound we think going forward for the next few months. Also, according to a July 19th article, some analysts are worried about domestic producers’ inventories of material, thinking that they may be overstocked on material, and that this is going to lead to issues for them going forward. Hopefully, this just lets all of us get our hands on some lower cost material.
Polycarbonate: PC pricing is headed up. We have been told about, but have not seen, an $.18 per pound increase on PC for August 1st from one of the domestic producers, and think that the trends for pricing could continue up going forward. It seems that producers are very tired of material be commoditized in the market place. As we have long stated, PC prices are down overall in the long term pricing trend when compared to other resins. We think that there is going to be more of a push from producers for price increase, but not really sure what this is going to do. CD/DVD, water bottle, and a few other grades of PC are trying to go the way of the Dodo bird, so demand is not as strong for PC as it once was. It is going to be interesting to see how this is all going to play out. We do think that you can expect to see some higher pricing going forward.
Nylon: Nylon seems to be continuing up. Producers have been trying to “out increase” each other is seems like, and we are bearing the brunt of this. Prices on nylon will continue to stay strong, and this is for material from prime virgin all the way down to parts. Better demand out of automotive and a housing sector that has adjusted to a new normal level have been the biggest homes for materials over the past few months. We could see a bit of a slow down and softening in pricing going into the late fall and early winter on Nylon, but nothing that we can hang our hat on for now. We will keep you posted.
Acetal: There have been some rumors about an increase in copolymer Acetal pricing of around 10%. We have not been able to confirm this as of yet, but it would not surprise us at all. We have long thought that copolymer pricing is very low, and so an increase is somewhat warranted. It would not hurt to buy what you need now in anticipation of the 8/15 increase.
Polyester: PBT is still in very tight supply. We are not sure if the producers are having issues or they were just caught flat footed by demand, but it seems that there is not much material out there, and when you can order it, lead times are very long. We would not be surprised to see an increase coming down the pipe on PBT in the next few weeks based just off of how tight the material is. This is a time that if you can use an equivalent material you may have to.
*TDL Plastics is a NMSDC Certified (National Minority Supplier Development Council) supplier of plastic resin and is certified by the Houston Minority Business Council (HMBC) as a Minority Business Enterprise. Being Minority certified allows your company to increase its amount of minority spending by purchasing materials from TDL Plastics.
