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The mood in spot resin trading last week was . . . boisterous. At the PlasticsExchange trading desk, the first full week of April was the busiest week in almost a full year, when the market was still reeling in the aftermath of the Houston winter storm. Demand from both processors and resellers remained strong as the second quarter began, but the general lack of prompt supply also continued.

Spot Prime resin prices saw little change this past week: Polyethylene (PE) held steady at 2022 highs, while polypropylene (PP) prices slid a cent from the season’s highs first established weeks ago, writes the PlasticsExchange in its Market Update.

Producers did secure their price increases in March. PE added $0.04/lb and PP followed monomer contracts up a solid dime. Producers are steadfast in keeping margins high, according to the PlasticsExchange, with another round of price increases nominated for April. Although upstream PE inventories are bulging at record levels, much of it is packed in warehouses and destined for export. With ongoing equipment and ocean freight constraints at hand, producers are keeping incremental export offers at bay or priced out of reasonable reach. Official US monthly resin production data has been delayed, but PE producers claim to have throttled back production significantly, which could create additional sourcing challenges.

PE trading and volumes rebounded as April fully commenced. Healthy demand and tight availability kept commodity-grade pricing stable at generally elevated levels. High-density (HD) PE took over as the primary mover in the PlasticsExchange marketplace, with relatively high volumes of Injection and Blow Molding grades changing hands, both domestic and export to Mexico and Europe. Low-density (LD) PE film grades also saw swift sales, with replacement material hard to find. Linear-low-density (LLD) PE Injection grades also moved well, and while there was demand for LDPE Injection, supplies were scarce and carried a hefty premium, limiting transactions.

Despite the substantial movement of volume, export offers remained constrained at the beginning of April, a time when they might otherwise be plentiful, writes the PlasticsExchange. Producers secured their $0.04/lb March increase — the first uptick in contract pricing since July 2021. With limited export outlets because of logistics constraints, producers seem to have throttled back reactors to keep their surplus inventories from becoming overly burdensome. Perhaps the tight domestic availability and upward market momentum could propel PE prices even higher, as there is an additional $0.06/lb increase on average proposed for April.

In the PP market, demand stayed strong amid challenged supply and volatile monomer costs. Completed volumes at the PlasticsExchange clocked in at their highest tally in more than a month and were well distributed among homo-polymer, co-polymer, and random co-polymer PP grades. Prime PP prices shed a cent following weaker PGP monomer, and are still within striking distance of 2022 highs, though they are far off from year-ago levels, reports the PlasticsExchange.

The modest PP decline last week came as feedstock PGP and crude oil prices softened, and a steady stream of mostly off-grade railcars pelted the market, while imported Prime was sparse. Prime domestic railcars were available on a monomer plus margin basis, but most spot buyers like to transact at a firm and solid price. Although PP pricing declined a penny this past week, overall availability remains challenged with a pair of force majeure declarations in place, one in Louisiana and the other in California. After the $0.10/lb cost-push increase in March PP contracts, additional margin-enhancing efforts have been scattered, so April pricing will likely just follow the change in monomer costs again.

Read the full Market Update, including news about PGP pricing and energy futures, on the PlasticsExchange website.