Steve ( Stephen ) Friedewald’s Post

Chemical shipmentsfell by 0.3% in July, the fourth decline in the past five months. The decline in July reflected lower shipments of coatings & adhesives and all other chemicals that partially offset a gain in shipments of agricultural chemicals. Chemical manufacturing inventories also fell by 0.9% with declines across all major segments. Compared to a year ago, shipments were 1.2% lower while inventories were down 3.6% Y/Y. The inventories-to-shipments ratio remained stable at 1.24, a level lower than last year’s 1.27.

Chemical manufacturing shipments rose 0.5% in September with gains across all major segments. The largest gains were in agricultural chemicals and coatings & adhesives. Shipments of other chemicals rose at a slower pace. Chemical inventories fell for a fourth consecutive month, down another 0.3%. The largest declines were in coatings & adhesives, but other major segments declined, as well. The inventories-to-sales ratio for chemicals continued to move lower down from 1.22 in August to 1.21 in September, the lowest level in a year and a half. Compared to a year ago, shipments were essentially unchanged (off 0.1%) while inventories were 4.7% lower.

Chemical shipments were up for a third consecutive month in December, higher by 0.1% with gains in agricultural and other chemicals offsetting lower shipments of coatings & adhesives. Chemical inventories fell by 0.4% with declines in agricultural and other chemicals offsetting higher inventories of coatings & adhesives. Compared to a year ago, shipments were 1.5% higher while inventories were down 3.7% Y/Y. The inventories-to-shipments ratio remained steady (compared to November) at 1.21. A year ago, the ratio was 1.27.

Resin Price Report: Demand Remains Strong, Despite High Interest Rates: Processors bought material for short-term needs and to restock inventories, although relatively high interest rates kept some from adding to on-hand resin stocks. 

Chemical shipments rose in June following three consecutive declines. Shipments of chemicals were up 0.6% to $52.7 billion with gains across all three segments. Inventories of chemicals fell 0.7%, following flat growth in May. Compared to a year ago, shipments were down 1.8% Y/Y while inventories were off 2.4% Y/Y. The inventories-to-sales ratio moved lower from 1.26 in May to 1.24 in June.

The U.S. Geological Survey reported that monthly production of soda ash in August was 869 thousand tons, down 7.7% compared to the previous month and down 8.2% Y/Y. Stocks fell 15.2% over July to 312 thousand tons at the end of the month, an 11-day supply. Ending stocks were up 31.6% Y/Y. U.S. production of major plastic resins totaled 8.5 billion pounds during August 2023, up 1.6% M/M, and up 6.9% Y/Y, according to ACC statistics.  Year-to-date production was 64.1 billion pounds up 0.9% YTD/YTD. Sales and captive (internal) use of major plastic resins totaled 8.6 billion pounds, up 6.8% M/M and up 7.3% Y/Y. Year-to-date sales and captive use were 63.1 billion pounds, up 0.9% Y/Y.

Details in the ISM Manufacturing PMI® report indicate the chemical industry continued to contract in August with declines in new orders and production. Employment and supplier deliveries increased. Inventories and backlogs remained unchanged. Following flat growth in July, chemical shipments rose 0.3% to $52.8 billion in August. Shipments of coatings & adhesives and all other chemicals offset slightly lower shipments of agricultural chemicals. Inventories of chemicals eased for a third straight month, down 0.1% to $64.9 billion. Gains in the inventories of agricultural chemicals were offset by lower inventories of coatings & adhesive and all other chemicals. Chemical shipments were off 1.3% Y/Y while inventories were down 4.0% Y/Y. The inventories-to-sales ratio was unchanged in August at 1.23, slightly lower the 1.26 last August.

Monthly Resin Report: Destocking Finally Runs Its Course: The extended period of destocking stretching all the way back into last year has run out of steam, as production and inventory levels renormalize.

Chemical shipments were flat in February as shipments held steady in “all other chemicals”, declined in agricultural chemicals, and gained in coatings and adhesives. Chemical inventories fell by 0.1% as a build in agricultural chemicals was offset by declines in other chemicals. Compared to a year ago, shipments were 2.3% lower and inventories were down 3.1% Y/Y. The inventories-to-shipments ratio decreased from 1.23 to 1.22 in February. A year ago, the ratio was 1.23.

Resin Market Dynamics: Navigating the Ebb and Flow of Commodity Prices! As 2024 unfolds, the commodity resin market is showing signs of stabilization, with prices of the five major resins largely remaining flat. This trend reflects a complex interplay of supply, demand, and global market forces. Feel the pulse of the industry as stakeholders navigate through the nuanced landscape of resin pricing, balancing production capacities, market demands, and strategic positioning. Polyethylene (PE) Prices: PE prices dropped in December, with suppliers canceling previous increases and issuing new hikes for January, aiming to halt further price erosion. The market is poised for a potential increase, especially if exports strengthen. Polypropylene (PP) Prices: PP prices remained flat in December, mirroring propylene monomer trends. The market faces volatility due to tight monomer inventories and a subdued demand, potentially leading to further production rate cuts. Polystyrene (PS) Prices: PS prices continued to drop in December, with expectations of flattening prices in the near term, primarily due to improved benzene supply and a lackluster demand for PS resins. PVC Prices: PVC prices declined in December, with suppliers proposing increases for January. However, these initiatives might face resistance, leading to a potential flattening of prices. PET Prices: PET prices decreased in December, driven by lower raw material costs and seasonal demand slowdown. A slight rebound is expected in the near term, contingent on raw material price movements. The current state of commodity resin prices reflects a market in flux, with industry players cautiously navigating through supply challenges, demand uncertainties, and strategic pricing maneuvers. As 2024 progresses, the market's response to these dynamics will be crucial in shaping the trajectory of resin pricing and availability. #CommodityResins #MarketDynamics #ResinPricing #SupplyChain #PlasticsIndustry