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Highlights
Volumes sputter rather than build
Monomer holds
Mixed economic data released
Sealed Air accepts offer to sell
Resin Markets
Spot resin trading was decent today but less active than I was anticipating and I'm feeling the rush before the holiday just might not be coming. Still November has built to a decent month and from my experience there will be opportunities these next 10 days even with Turkey Day nearing.
LLDPE once again flowed to Europe at higher prices versus last week as the message that supplies have tightened and prices may be firming a touch has been spreading. For months the threat of other regions having competitive offers has pushed US resin lower but international clients have been admitting to our team that US resin is preferred even if there is a little premium to it. Now, other regions have come a long way quality wise but US resin still is the quality standard.
Polypropylene has been a bit more of a struggle to close as customers price expectations continue to lower with another expected drop of a couple of cents in PGP contracts but the truth is inventories have been worked down at both the producer and reseller levels and the spot market is not drowning in resin. Sellers are not as quick to sell inventory they've been keeping and storing at a loss to match the lowest tick that isn't necessarily ready for weeks based on PGP movements. We're seeing a bit of a decoupling currently between spot PP and PGP prices.
Monomer Markets
Monomer trading was a little lighter than the heavy pace we’ve been seeing the last week or so, November PGP ended the day marked even at $.24/lb and ended the day bid at that level. There was a slight flaring issue reported at Enterprise's PDH1 today but it does not seem serious. Second quarter 2026 PGP was also booked at $.2875/lb.
December Ethylene was sold at $.16625/lb and February 2026 Ethylene was brokered at $.18375/lb while November was flat to yesterday at $.165/lb, also ending the day bid at that level which usually signals some buying interest. First quarter 2026 was done many times at $.18375/lb.
US Economic Data
We got a nice amount of data today and much of it on employment and it really wasn’t totally awful. In fact, the US added 119,000 Nonfarm Payrolls in September, versus an expected 50,000 and a 4,000 job loss in August. Manufacturing lost 6,000 jobs versus a 15,000 lost in August and an expected 8,000 loss. However, the unemployment ticked slightly higher to 4.4%. Initial jobless claims for the week ending November 15th was 220,000 versus an expected 227,000. I still believe with the shutdown we’re looking at a tough employment situation and the Fed will end up cutting rates in December.
The Philadelphia Fed Manufacturing Index came in at -1.7 for November which is a big improvement from -12.8 which was the reading in October. Despite bouncing 11 points, the Philly Fed Index is still stuck in negative territory, and the steep slide in new orders and shipments shows demand has kept losing footing. Companies are hanging onto workers and pushing through higher input costs where they can, but customers are clearly getting more sensitive to price. Still, the forward outlook appears much brighter, firms are signaling the strongest six-month outlook in a year, with healthier order books and capital spending plans suggesting this soft patch may not stick.
Existing home sales also came in at 4.1 million which was in line with expectations. If the housing market can get going it will be a welcome boost to resin demand.
Global Trade
The US treasury has reported that Indian and Chinese refineries have taken steps to comply with the most recent US sanctions on Russian Oil. The previously sanctions seemed to be rather ineffective with Indian officials stating they would not stop buying but this is an about face after the US tariff war has drug on with both nations. Crude oil has been bouncing between both sides of $60/bbl closing today right at $59/bbl.
President Trump has signed an order reducing tariffs on many Brazilian agricultural imports in a move to keep inflation under control. The targeted products are mostly ones that we do not grow in the US. I’m hopeful that this will sway Brazil to drop the anti dumping fees they imposed on US Polyethylene and Polypropylene in August which has slowed the flow of resin to the South American nation and opened up more opportunities for Chinese and Middle Eastern supply.
Sealed Air
In a big one for our industry, Sealed Air has agreed to sell their business to Clayton, Dubilier, and Rice, a private equity firm, in an all cash deal for $10.3 billion, at the time of the announcement it was a 41% premium over the stock price for shareholders. The closing price today was $42.02 per share. The deal is scheduled to close in Mid 2026. Below you can see Sealed Air’s stock price along with LDPE Film prices. You can track other public companies in our industry on our customizable dashboards, available with our Gold subscription.
Logistics
Friendly reminder piggy backing off of yesterday’s comments, get those trucks set up and on the road, do not wait. Trucks will be more expensive and harder to source as Thanksgiving gets closer. All of the major shipping warehouses in Houston have confirmed they will be closed on Friday, November 29th on top of Thanksgiving Thursday, plan accordingly.
Friday here we come!
-Dominick Russo, CFA
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