IHS CHEMICAL Market Advisory Service

Global Plastics & Polymers Polyolefins

Weekly
07 July 2017 | Issue 279 ihs.com/chemical

North America
North America Spot Pricing
Week Ending: July 07, 2017
Range $/Ton Range Cts/lb This Week Avg. Last Week Avg. Change
LDPE, Spot Domestic GP Film, FOB Houston, railcar 1389 1433 63.00 65.00 64.00 64.00 0.00
LLDPE, Spot Domestic Butene Film, FOB Houston, railcar 1279 1323 58.00 60.00 59.00 59.00 0.00
HDPE, Spot Domestic Blow Molding, FOB Houston, railcar 1235 1279 56.00 58.00 57.00 57.00 0.00
PP, Spot Domestic Homopolymer IM/Fiber, FOB Houston, railcar 1080 1124 49.00 51.00 50.00 50.00 0.00

LDPE, Spot GP Film, DAP Laredo, railcar 1124 1168 51.00 53.00 52.00 52.00 0.00
LLDPE, Spot Butene Film, DAP Laredo, railcar 1058 1102 48.00 50.00 49.00 49.00 0.00
HDPE, Spot Blow Molding, DAP Laredo, railcar 992 1036 45.00 47.00 46.00 46.00 0.00
Notes:
Prices are freight adjusted to an FOB Houston basis.
Spot Prices, as discovered by IHS, are recorded from the prior reporting date through the time of current publication.
Price range indices represent the numeric average of transactions in North America and are not adjusted for volume.
Prices represent prime grade material in hopper car volumes; hopper car volumes range from 180,000 to 210,000 pounds.
Postings in the 2nd half of the month may also include deliveries for the following month.
Grey shading represents a notional price, indicating a lack of reported transactions where price defaults to a numeric average of bids and offers.

North America Polyethylene Market Overview North America: HDPE Blow Molding Spot Pricing
The spot polyethylene (PE) market was quiet this week with 70
several market participants away for the July 4th holiday, but
60
new upward pressure on PE prices has also stagnated purchases
Cents Per Pound

as buyers evaluate current offers in the market. 50

40
The spot export market was also quiet this week now that
prices have stabilized and buyers have returned to a cautious 30
stance.
20

Supply of some high-demand grades such as Injection Molding 10

HDPE continues to put pressure on prices of these products, 06/09/17 06/16/17 06/23/17 06/30/17 07/07/17
while others are on a steadier trend. HDPE - Blow Molding
Non-Integrated Cash Cost (Spot Ethylene)
Integrated Cash Cost (Weighted Avg. Ethylene Cost)
Source: IHS 2017 IHS
IHS Chemical | Global Plastics & Polymers Polyolefins Weekly

Spot ethylene prices have been on a steady declining trend over the past few weeks, pointing toward lower PE operating
rates, and hence the current tight supply scenario.

Accordingly, producer price increases for this month remain under consideration, although buyers are showing
resistance to higher prices ideas.

Westlake also recently announced its intention to increase the price of all its PE products by 3 cents per pound (cpp),
effective 1 August and rescinding all previously announced increases.

North America: LLDPE Butene Spot Pricing North America: LDPE GP Film Spot Pricing
70 70

60 60
Cents Per Pound

Cents Per Pound

50 50

40 40

30 30

20 20

10 10
06/09/17 06/16/17 06/23/17 06/30/17 07/07/17 06/09/17 06/16/17 06/23/17 06/30/17 07/07/17
LLDPE - Butene LDPE - GP
Non-Integrated Cash Cost (Spot Ethylene) Non-integrated Cash Cost (Spot Ethylene)
Integrated Cash Cost (Weighted Avg. Ethylene Cost) Integrated Cash Cost (Weighted Avg. Ethylene Cost)

Source: IHS 2017 IHS Source: IHS 2017 IHS

North America Polypropylene Market Overview North America: PP Homopolymer Spot Pricing
PP prices were at this week at 50 cents per pound (cpp) on a 60
FOB Houston basis, with many market participants absent due
to the holiday shortened week. 50
Cents Per Pound

Wide spec prices have been reported near 50 cpp for

homopolymer and we have heard multiple reports of spot 40
prime bulk trucks being sold near 60 cpp as spot offers have
been greatly reduced in recent weeks. 30

On 5 July Braskem announced its intent to increase PP prices 5

20
cpp above the change in propylene monomer from August to 06/09/17 06/16/17 06/23/17 06/30/17 07/07/17
September. On 7 July Pinnacle Polymers announced a similar Homopolymer - IM/Fiber
initiative for 3 cpp. Cash Cost (Spot PGP)
Cash Cost (Purified Spot RGP)
Source: IHS 2017 IHS
Both Formosa Plastics and Ineos continue to operate under
force majeure.

US Census Bureau shows May imports were 73 millions, split approximately 55/45 between homopolymer and
copolymer.

The July forecast reects an increase of 1.5 cpp in line with the monomer forecast.
IHS Chemical | Global Plastics & Polymers Polyolefins Weekly

Asia
Asia Spot Pricing
Week Ending: July 07, 2017
Range $/Ton Range Cts/lb This Week Avg. Last Week Avg. Change
LDPE, Spot GP Film, CFR China 1080 1130 48.99 51.26 50.12 51.03 -0.91
LLDPE, Spot Butene Film, CFR China 1040 1070 47.17 48.53 47.85 48.08 -0.23
HDPE, Spot Blow Molding, CFR China 1000 1030 45.36 46.72 46.04 46.27 -0.23
PP, Spot Homopolymer IM/Fiber, CFR China 990 1010 44.91 45.81 45.36 45.36 0.00
Notes:
Spot Prices, as discovered by IHS, are recorded from the prior reporting date through the time of current publication.
Grey shading represents a notional price, indicating a lack of reported transactions where price defaults to a numeric average of bids and offers.

Asia Polyethylene Market Overview

In China, the import market remained subdued this week as most converters were reluctant to carry additional
inventories and traders were on the sidelines. The restart of some PE plants following maintenance and the continued
weakness of ethylene prices continued to weaken market sentiment.

Low-priced cargoes were still available in the market after most Asian producers issued their offers for July allocations.
Most Iranian producers settled their PE prices on ICIS formula price, while a new Iranian supplier was using one-way
pricing to sell its new products at $1,020-1,030 per mt CFR China for LDPE GP lm and $960-970 per mt CFR China for
LLDPE butene-1 lm.

The Chinese domestic spot market continued to decline this week on the back of deep-sea cargoes. In addition, the
uctuating LLDPE futures hurt market sentiment.

Demand remained weak as converters were still on the sidelines during the off-season. Market players were paying close
attention to the overall inventory level in July. If inventory remains at the low level seen at the end of June and does not
rally during the rst few weeks of July, this will signal that inventory will continue to decline further in the second half
of the month.

Sinopec and PetroChina rolled over their prices this week.

Asia Polypropylene Market Overview

In China, the import market was quite quiet this week with prices unchanged amid a lack of offers and bids. PP supply
from Asian producers was quite limited as there were no low offers available this week.

Many re-exporting converters have turned to purchasing PP resin from domestic producers, citing competitive domestic
products and stable domestic prices.

The price premium of impact copolymer over homopolymer narrowed to zero from the normal level of $50-60 per mt
amid long supply of impact copolymer and the fact that there is no re-exporting demand for impact copolymer, while
there is for homopolymer.

The domestic PP market was stable this week as some re-exporting converters purchased domestic products. Market
players perceived that there was not much room for domestic PP prices to decline as there is no supply pressure until
2018.

The rallying crude oil prices and strong PP futures on the Dalian Commodity Exchange spurred market sentiment. In
addition, the continued decline of Chinas inventories and the expectation of economic improvement in China
increased market players condence.

Sinopec and PetroChina rolled over their prices this week.

IHS Chemical | Global Plastics & Polymers Polyolefins Weekly

West Europe
West Europe Spot Pricing
Week Ending: July 07, 2017
Range Euro/Ton Range $/Ton This Week Avg. Last Week Avg. Change
LDPE, Spot Domestic GP Film, Delivered, West Europe 1200 1220 1364 1386 1375 1382 -7
LLDPE, Spot Domestic Butene Film, Delivered, West Europe 1120 1140 1273 1295 1284 1315 -31
HDPE, Spot Domestic Blow Molding, Delivered, West Europe 1080 1100 1227 1250 1239 1270 -31
PP, Spot Domestic Homopolymer, Delivered, West Europe 1080 1100 1227 1250 1239 1247 -8
Notes:
Delivered indicates product arrival at converter plant
Exchange Rate: 0.88 Euro per USD
Conversion: $22.046/ton equals to 1 cent per pound
Spot Prices, as discovered by IHS, are recorded from the prior reporting date through the time of current publication.
Grey shading represents a notional price, indicating a lack of reported transactions where price defaults to a numeric average of bids and offers.

West Europe Polyethylene Market Overview

Monomer prices for July dropped by 50 per mt in the nal settlement, marking the second consecutive month with a
drop in ethylene price.

Supply across Europe is currently good with only minor production hiccups reported.

Based on our assessment, prices will shed some margin in July, although the decrease will not be signicant.

Meanwhile, spot prices should recede as supply eases, but it is expected to be an interesting month as there are signs
that demand could be better than the seasonal norm, based on contract settlements. However, buyers are going to be
circumspect until they feel that prices have hit their perceived fair bargain level.

West Europe Polypropylene Market Overview

A settlement has been made for July propylene at minus 50 per mt.

Buying sentiment in July is expected to remain unchanged compared to June and prices are likely to fall more than the
monomer.

Supply of PP has been on the longer side of balanced, and unless there are large-scale outages in July, PP availability will
not be a factor that will drive margins higher.

The arbitrage gap for Middle Eastern producers favors Europe strongly over Asia and this will help to support imports in
the coming weeks. The additional supply from outside Europe will help support buyers in their aspirations to lower
prices more than the monomer, with a decline of perhaps 10-20 per mt more than the monomer drop.
IHS Chemical | Global Plastics & Polymers Polyolefins Weekly

World Spot Prices

Global LDPE GP Film Spot Pricing Global LLDPE Butene Spot Pricing
70 1,542 65 1,432

65 1,432

Dollars Per Metric TOn

Dollats Per Metric Ton
60 1,322
Cents Per Pound

Cents Per Pound

60 1,322
55 1,212
55 1,212

50 1,102
50 1,102

45 992 45 992
06/09/17 06/16/17 06/23/17 06/30/17 07/07/17 06/09/17 06/16/17 06/23/17 06/30/17 07/07/17

North America West Europe CFR China North America West Europe CFR China

Source: IHS 2017 IHS Source: IHS 2017 IHS

Global HDPE Blow Molding Spot Pricing Global PP Homopolymer Spot Pricing
65 1,432 65 1,432

60 1,322
Dollars Per Mertic Ton

Dollars Per Metric Ton

60 1,322
Cents Per Pound
Cents Per Pound

55 1,212
55 1,212
50 1,102

50 1,102 45 992

40 882
45 992
06/09/17 06/16/17 06/23/17 06/30/17 07/07/17
06/09/17 06/16/17 06/23/17 06/30/17 07/07/17
North America West Europe CFR China
North America West Europe CFR China
Source: IHS 2017 IHS Source: IHS 2017 IHS
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