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2.18.2025 Our Daily Resindex Polypropylene prices gained a half cent today to $.625/lb for HoPP and $.685/lb for CoPP. Fresh spot prime PP railcar offers are coming in priced on a PGP plus basis with limited availability. Traders are selling their already light inventories into this rally and with replacement costs rising, only restocking as needed.
The effects of Enterprise declaring Force Majeure due to outages at their PDH 1 and 2 units are being felt in the spot PGP market with February PGP trading several times today at $.4625/lb. This matches the highest price of the cycle seen on January 24th, otherwise PGP has not been this high since then September 27th, 2024.
Based on current spot PGP levels, the market is setting up for a $.035-.04/ price increase which would bring lb February PGP contracts to $.475-.48/lb, up from $.44/lb in Jan. PGP. Producers have done a great job with production / supply discipline and are also seeking $.02-.03/lb margin increase to help re-establish better margins.
Polypropylene prices have been climbing steadily, and these moderate increases are more palatable than in Q1 of prior years which saw much larger price swings, where strong Q1 rallies led to a Q2 crash. This market seems more sustainable.
Cold temperatures are once again sweeping across the US and although they likely will not stay cold enough for long enough in the petrochemical producing gulf coast to cause any production issues. Still, it would be worthwhile to keep an eye on temps which are forecast to dip into the 20’s overnight Wednesday/Thursday. We have yet to confirm any preemptive shutdowns as was the case with Winter Storm Enzo in January and we will update our production map if outages occur.
-Dominick Russo, CFA
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