Market Update - September 13, 2013The ExchangePlasticsbringing the market to you

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The spot resin markets picked up as the second trading week of September closed out at The Plastics Exchange. Spot Polyethylene prices renewed their trek higher fueled by additional production issues. Force majeure was announced for HDPE which further tightened supply, giving September the best chance to implement an increase in months. A nickel is nominated for each September and October. Spot Polypropylene bounced back a half-cent while it looks for direction after contracts already settled flat for September.

Yet again, the major US energy markets moved in different directions, but this time towards each other, slightly closing the wide gap. The Crude Oil: Natural Gas ratio contracted to 29.4:1. Oct Crude Oil futures opened the week with a sizeable $2 drop in before finding support at $106.50/bbl. Much of the losses were recouped by Friday's close of $107.50/bbl, just down a dollar from the last week. October Natural Gas futures climbed 4%, ending up $.15/mmBtu at $3.677/mmBtu. Ethane resumed the downward trend, gliding lower still to $.246/gal ($.103/lb).

Ethylene continued the now familiar pattern of starting the week lower and then recovering. Ethylene for September delivery slid $.005/lb to around $.535/lb before bouncing to $.545/lb, edging out last week's close. The forward market is slightly backwardated with only a half-cent separating prompt from end of the year prices. Logistical challenges have continued to keep Ethylene out of the downstream PE producer's hands.

Spot PE prices added another $.01-02/lb this week, depending on grade, as supply issues continued to plague the market. Inventory offers not reflecting the full September $.05/lb increase were quickly gobbled up. By week's end, fresh resin began to show carrying new higher prices. Operating rates for PE have been in the 90s% since March, however, another producer's force majeure announcement has further tightened supplies, adding to the recent run up in PE prices, particularly for HDPE. Preliminary data suggests that August was one of the strongest months of the year in terms of sales as processors restock. Snug supply and solid demand increase the likelihood for some portion of the September increase to be implemented.

Spot PGP trading was very volatile this past week, falling down to $.635/lb on Monday, two cents lower than last Friday's close. By Friday, the market had stair-stepped up $.03/lb to $.665/lb to end the week up a penny. Earlier in the month Sept contract PGP rolled even at $.70/lb. The forward curve continues to be flat through year's end.

The spot PP market's half penny reprieve from the previous week was short lived, with the losses already regained. Spot demand is a little soft and offgrade prices have eased to a more normal discount to contracts. Although material remains generally tight, most grades are source-able and decently priced opportunities exist at The Plastics Exchange. Last month's production was down to 1.47 billions pounds which was a slight decline from July. August was very balanced, as supply and demand were in lockstep with a minor 2 million lb build in inventories. Exports remain difficult to most regions.

The resin markets picked up as we moved further into September. Spot PE prices advanced $.01-.02/lb this week as tightening supply prompted resin buyers to procure what they could at last month's pricing giving some validity to the September $.05/lb increase. Despite September PP contracts rolling flat, spot regained last week's $.005/lb loss placing Generic Prime material priced near parity to contracts. Spot export markets continue to be an afterthought as higher U.S. prices are discouraging business to most areas.

Jay Schreiber and Dominick Russo for Michael Greenberg The Plastics Exchange312.202.0002@ResinGuru

Disclaimer: The information and data in this report is gathered from exchange observations as well as interactions with producers, distributors, brokers, and processors. These sources are considered reliable. The accuracy and completeness of this information is not guaranteed. Any decision to purchase or sell as a result of the opinions expressed in this report will be the full responsibility of the person authorizing such transaction. Our market updates are compiled with integrity and we hope that you find them of value. Chart values reflect our asking prices of generic prime railcars delivered USA.

TPET EP

7,473,232 $.700 $.820

3, $.700 $.880

3,634,784 $.660 $.800

2,470,000

1,505,380 $.650 $.770

834,552 $.780 $.865

$.790

$.660 $.720

$.720 $

400,000 $.690 $.780

$.710 $.740

$.660 $.850

Total lbs Low High

485,012

$.710 $.850

$.725 $.765

$.650 $.690

$.750 $.800

$.640 $.680

$.720 $

$.630

$.700

$.690 $.730

$.700 $.740

$.810 $.860

Bid Offer

Contract Spot

HDPE - Blow Mold 2,253,312 $.680 $.750

HDPE - Inj 1,905,404 $.700 $.775

PP Homo - Inj 1,536,920 $.700 $.850

1,386,828 $.720

LDPE - Film 1,178,564 $.670 $.830

HMWPE - Film 1,027,748 $.740 $.780

$.890

$.710 $.750LDPE - Inj 878,644

$.860 $.925

HIPS 760,000 $.990 $1.025

754,552 $.700 $.780

Total Offers 12,910,156 lbs

LLDPE - Inj 468,184 $.700 $.780

Resin Total lbs Low High

GPPS 760,000

$.670 $.710

$.690 $.730

$.800 $.840

$.810 $.850

$.760 $.800

$.735 $.775

$.710

$.860 $.910

$.980 $1.03

$.670 $.710

$.680 $.720

Bid Offer

Contract Spot

$.750

PP Homopolymer 1 year

PP Copo - Inj

Dominick Russo - Editor

LLDPE - Film

HDPE Blow Molding 1 year