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PE, solid PS prices fall 2 cents

February 25, 2016 Updated 2/25/2016

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PE, solid PS prices fall 2 cents

North American selling prices for polyethylene and solid polystyrene resins each have fallen an average of 2 cents per pound since Feb. 1, resulting mainly from lower feedstock costs.

The PE drop affects all grades of high density, low density and linear low density resin. It’s the second consecutive monthly price drop for the material after a three-month stretch in which prices were flat. The January price drop was 3 cents.

Crude oil prices remain a global price setter for PE, even though most North American PE uses natural gas as a feedstock. West Texas Intermediate (WTI) oil prices started the year around $ 39 per barrel but soon declined, falling under $ 30 on two occasions and standing at just under $ 32 in early trading Feb. 25.

U.S./Canadian PE markets got off to a good start in 2016, with sales of HDPE and LLDPE each up almost 6 percent in January, according to the American Chemistry Council. HDPE export sales surged almost 40 percent for the month, overcoming a 1 percent drop in domestic sales. The story was somewhat similar in LLDPE, where a 26 percent gain in export sales boosted a 1 percent uptick in sales into the domestic market.

Regional PE makers remain focused on building the export market in order to handle large volumes of new PE capacity that are scheduled to come on line beginning this year. Increased availability of low-priced natural gas from shale formations has led to a wave of new PE capacity expansions throughout North America.

For PS, the 2-cent drop ended a streak of four consecutive months in which prices for the material had been flat. PS maker Americas Styrenics LLC had pre-announced the price decrease in early February, and the broader market held to that amount.

The PS decline was driven in part by lower selling prices for benzene feedstock, which is used to make styrene monomer. Benzene prices for February averaged $ 1.84 per gallon, down 13 percent from the January price. Some market watchers believe that the benzene market now has reached bottom and could begin heading up again.

North American PS sales notched a moderate sales gain of 1.2 percent in January, according to ACC. Much of that growth came from the electrical/electronic end market, where January sales surged more than 13 percent.

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