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Monthly Resin Report: Strong Sales, Feedstock Costs Push Up Contract Prices

By Zachary Moore

September brought higher contract prices to both the US polyethylene (PE) and polypropylene (PP) markets, driven primarily by stronger domestic sales and higher feedstock costs.

Sales data through August showed both domestic and overall PP sales reaching their year-to-date highs on the month. Domestic PP sales in North America through the first eight months of 2023 are down 4.5% compared with the same time period of 2022.

Meanwhile, domestic PE sales saw their second highest monthly year-to-date sales figures in August, trailing only the month of March. Total domestic PE sales declined by 7.6% over the first eight months of 2023 compared with the same period of 2022, while overall sales rose 4.9% over the same time period, driven by persistent strength in exports.

US PE remains competitive in export markets

Integrated ethylene cash costs rose by around 1.25 cents/lb in September relative to August, the highest we have seen year to date. Ethane-based PE production economics remain highly competitive relative to European or Asian naphtha-based cracker economics, however, ensuring that US PE remains a competitive option in nearly every major export market.

Shell has begun running prime product for at least some grades out of its new plant in Pennsylvania while Bayport Polymers announced that its new plant started up in early October. Of the current wave of new North American PE capacity, this leaves only Nova’s new plant in Ontario still to start up. That project has faced further delays due to an issue at Nova’s recently expanded Sarnia cracker, which will supply ethylene to the new PE plant.

September PE contracts settled 3 cents/lb higher from August, marking the second consecutive month in which PE contract prices moved up. Benchmark PE contracts have risen by a cumulative amount of 9 cents/lb since the start of the year.

PE inventories fell for a fourth month in August, even with average operating rates remaining at comparatively high levels. Contract price increases also found support from higher spot prices for domestic, wide spec, and export cargoes.

Higher production costs also contributed to upward momentum in PE contract prices, as volume-weighted average cash costs for ethylene rose around 3 cents/lb in the third quarter relative to the average level for the first half of the year.

September PP contracts rise 4.5 cents/lb

In the PP market, September PP contracts rose 4.5 cents/lb, tracking an equivalent rise in same-month propylene monomer costs. Several producers announced initiatives to increase spreads between polymer grade propylene (PGP) and PP contract prices, but these increase initiatives were not successfully implemented in most cases given unfavorable supply and demand dynamics.

Average PP operating rates over the first eight months of the year have averaged 74.4%; no month in 2023 has seen average operating rates top 80%. While August sales figures for both overall sales and domestic sales reached year-to-date highs in August, many participants commented that they expected to see the pace of sales trailing off again in September.

Propylene costs rose month on month in September, as several unexpected production issues limited feedstock supplies, pushing spot prices higher month on month. Supply/demand fundamentals remain weak, with availability plentiful following the startup of some new propylene capacity while demand from PP and other derivatives remains slow amid an ongoing downturn in US manufacturing activity.

Braskem announced plans to idle one of its two production lines at its Marcus Hook, PA, plant until market conditions improve.

BASF Divests Expanded Polypropylene Foam Business

By PlasticsToday Staff

BASF has entered into an agreement to divest its Neopolen expanded polypropylene (EPP) business to Knauf Industries GmbH. Neopolen enables the manufacturing of lightweight molded parts for the automotive industry, as well as for heating and air conditioning applications. Knauf Industries is a leading European manufacturer of complex molded parts made of EPP foams and other materials and employs more than 2,000 people in eight countries. Its customer base is primarily in the automotive, air conditioning, and sports & leisure industries.

The transaction includes, among other things, a production plant at the BASF site in Schwarzheide, Germany, along with the products, intellectual property, customer and supplier contracts, and trademark rights. About 40 employees at the site are affected. Pending potential approvals by relevant merger control authorities, closing of the transaction is expected by March 31, 2024.

“With Knauf Industries we have found an excellent partner who will strategically continue the Neopolen business,” said Mia Pettersson, head of the global specialty polymers business unit at BASF. “The future of the EPP business can best be secured by selling it to a company that offers synergies with other foams and a forward integration into component production. Under the ownership of Knauf Industries —?a leading player in the foam industry —?the Neopolen business will be well positioned to realize its full potential,” said Pettersson.

“The Schwarzheide site is an attractive location with an integrated infrastructure and dedicated employees with great experience and a lot of know-how, especially in our Neopolen plant,” said Anne Francken, managing director and director of industrial relations at BASF Schwarzheide GmbH. “It was important for us to secure jobs in the Neopolen plant in the long term and to preserve synergies at the site. We are very much looking forward to working with Knauf Industries at our site.”The acquisition of the BASF EPP business expands Knauf’s foam portfolio for different industries by adding technical expertise and experienced employees and fits perfectly into its growth strategy, said Knauf.

ICIS Now Tracks Pyrolysis Oil Pricing for Chemical Recycling

By Rick Lingle

The chemical recycling (aka advanced recycling) market for plastics is skyrocketing. The plastic packaging portion of the chemical recycling market, which is valued at $730 million in 2022, is projected for significant yearly growth of 43.5% to reach a value of $13.08 billion in 2030, according to a report from Research and Markets published in August.

At the heart of the accelerating action is the pyrolysis oil generated by the process.

ICIS, a global source of commodity intelligence, launched Pyrolysis Oil Pricing Indexes to help satisfy the increasing consumer demand for the pricing of chemical recycling outputs. ICIS is the first to provide this pricing index.

It will be part of ICIS’ Mixed Plastic Waste – Europe pricing report launched in 2021, which is now ICIS Mixed Plastic Waste and Pyrolysis Oil report.

The mixed plastic waste pricing service currently includes the key feedstocks for pyrolysis oil — mixed polyolefin bales and high plastic content refuse derived fuel bales. The introduction of a pricing index for pyrolysis oil itself will give unrivalled visibility across this key chemical recycling chain. This sits alongside ICIS’ comprehensive coverage of mechanical recycling markets, allowing players to directly compare chemical and mechanical recycling prices and dynamics for the first time.

Pyrolysis oil is used as a drop-in alternative to replace fossil-based naphtha, a flammable liquid hydrocarbon used in the steam cracking process to create plastics, making plastic production more circular.

Consumer and investor pressures along with increasing regulation are driving the chemical industry’s transition to a circular economy. This in turn is driving the development of chemical recycling and in particular the pyrolysis oil market is starting to scale as the largest current output of chemical recycling.

As of September 2023, pyrolysis-based plants targeting mixed plastic waste (with a focus on polyolefins) as feedstock account for ~60% of all operating chemical recycling capacity in Europe according to ICIS Recycling Supply Tracker – Chemical.

The total capacity for such projects in Europe is expected to become almost seven times larger by 2028 growing to 600,000 tonnes/661,387 tons yearly, based on the projects considered as the final investment decision (FID). If the pre-FID project pipeline is unlocked, then the total pyrolysis capacity targeting mixed plastic waste can reach as much as ~1.7 million tonnes/1.87 million tons yearly by 2028.

“The pressure to transition to a circular economy will continue to intensify and we can see how that has impacted the chemical recycling market and in particular the pyrolysis oil market,” says Mark Victory, senior editor, recycling, ICIS. “Despite the negative macroeconomic conditions currently impacting across petrochemical and recycling markets, investment in chemical recycling has continued at pace.”

ICIS: Pyrolysis oil has lacked reliable price indicators.

Pyrolysis oil prices do not track their virgin equivalents, meaning that this key emerging market has lacked reliable, independent price indicators to benchmark against. ICIS’ Pyrolysis Oil Pricing Index will enable buyers and sellers to assess the overall opportunities in chemical recycling market with transparency and clarity.

“The addition of the new price series gives comprehensive coverage across the chain and compliments ICIS’ existing chemical and mechanical recycling supply trackers, alongside mechanical recycling price benchmarks, analytics and consultancy services,” Victory explains. “This gives customers a full suite of tools to compare and track the development of the various routes to circularity.”

For the polyethylene (PE) and polypropylene (PP) sectors, chemical recycling is seen by many as the most viable route to achieving mass-scale recycled food-contact packaging within Europe. ICIS' introduction of pyrolysis oil pricing is expected to bring significant clarity enabling customers to trade more effectively in a sector anticipated to experience remarkable growth in the years ahead.

IPEX Opens One of Industry’s 'Most Advanced' Plastics Manufacturing Plants

By PlasticsToday Staff

IPEX announced on Oct. 5 the grand opening of what it’s calling “one of the most advanced plastics manufacturing facilities in the industry” in Pineville, NC. The event was attended by more than 150 people including IPEX employees and leadership team, as well as the global CEO of Aliaxis, which owns IPEX; members of government; and local representatives.

The new 200,000-square-foot state-of-the-art plant features fully electric injection molding machines, proprietary automation, cloud connectivity, and industry-leading health and safety best practices, said IPEX in the news release. The facility will significantly increase IPEX’s US production capability to manufacture fittings for plumbing, electrical, industrial, and municipal applications.

Headquartered in Oakville, ON, IPEX is a leader in thermoplastic piping systems for municipal, industrial, commercial, and residential applications.

“This facility is an important part of our North American growth strategy to expand our US footprint and better serve our customers,” said IPEX CEO Alex Mestres. “I am proud to share that our $200 million?investment in this Pineville facility is IPEX’s largest investment to date and is one of the most advanced plastics facilities in the manufacturing industry. Thank you to the IPEX team, local partners, and government for your dedication and support in getting this facility operational.”

IPEX said it has invested in the Pineville area for more than 20 years, starting with an extrusion plant and distribution facility, growing to its current footprint of five manufacturing sites and three distribution centers located across North Carolina. IPEX has created nearly 700 jobs in the region, 150 in this new facility.

With sustainability in mind, the plant is fully climate-controlled, uses energy-efficient lighting, and high-efficiency machines to reduce the use of both electricity and water. A single electric machine uses 30% less power than hydraulic machinery, noted the company. The fully electric injection molding machines reportedly will contribute to approximately $700,000 in operational savings annually.

In addition to the ribbon-cutting ceremony, IPEX presented She Built This City, an organization dedicated to building pathways for youth, women, and marginalized communities in the construction and manufacturing industry, with a donation of $25,000.

“IPEX’s generous donation isn’t just about funds —?it’s the key to unlocking a world of opportunity in trades for a passionate cohort of women. Through our workforce development programs, we’re on a purpose-driven journey, training women in carpentry, plumbing, electrical, and painting,” said LaToya Faustin, executive director of She Built This City. “It’s more than just training; it’s about reshaping the industry. We’re not just honored; we’re on fire to amplify the presence of women in trades.”

IPEX also announced that it was awarded a Customized Training Grant from the state of North Carolina due to its continued growth in the Charlotte area. Valued at approximately $345,500, the grant will be used to fund specialized training programs over the next two years by Central Piedmont Community College. The programs will provide IPEX employees with training focused on safety, continuous improvement, mechatronics, polymers, and computers.

LyondellBasell has launched a suite of products under the name?Circulen?enabling brand owners to improve the sustainability of consumer products. The LyondellBasell?Circulen?product family supports the reduction of plastic waste through the use of recycled content, and a lower carbon footprint through the use of renewable-based content as compared to feedstock from fossil-based sources.?Circulen?products can be used in a variety of markets and applications, helping to bring sustainable solutions to life. Click here to learn more.