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Resin Markets
The spot resin markets are creeping their way towards the close of July and despite major news and data breaking this week volumes are notably lower than we’ve seen the rest of July. Optimistically I believe August will continue on the path we saw this month, perhaps not as busy but as trade deals are analyzed and decisions made, the domestic resin market can forge a path forward.
There were few opportunities and offers for Polyethylene that came across our trading platform today but a few cargoes were booked for LDPE Film to Europe as the Euro continues to lose some steam against the dollar. The Dollar has recovered nearly 4% against the Euro from the highs reached on July 1st settling today at 1.14615 $/€ and our clients overseas were not shy when using it in negotiations despite still being in an advantageous position for now. It’s important to remember though that it’s not necessarily the exchange rate when the deal is booked but when the resin is paid for that matters so trend is important unless hedging occurs.
Spot Polypropylene trading has gained some steam the latter half of July and today was no different, ready to ship truckloads were booked and COPP has been more active than HOPP this week where last week was flipped. PGP contracts are wrapping up settlements down a $.01/lb to $.375/lb for July and it's yet to be determined what producers will accept for PP contracts, they were seeking a $.02-.03/lb margin expansion this month and despite one call for a drop in PP contracts of $.005/lb, producers may be successful in keeping contracts flat to possibly gaining.
Monomer Markets
August Ethylene came together today at $.2675/lb and July was marked at $.26/lb as Ethylene continues to tick higher, up nearly a dime from 2025’s mid April low of $.16375/lb but still down nearly $.03/lb for the year. Calendar 2026 was sold at $.245/lb and 4Q2025 was done at $.2475. July spot PGP was marked at $.3425/lb, over $.03/lb below where July contracts are settling.
Global Trade/Tariffs
President Trump announced today a 50% tariff to be put in place against Brazil that would exclude orange juice, energy, and aircraft. He is continually referring to the prosecution of former President Bolsonaro in his announcements and its not uncommon for him to use tariffs to achieve other political goals such as stopping the flow of Fentanyl into the US.
Earlier in the day Trump announced that India would face a 25% tariff to go into place on August 1st as well an undisclosed “penalty” for doing business with Russia along with its participation in BRICS. By day’s end though he had walked that back stating they were still negotiating and it could still be avoided..
Trump also did away with tariff and duty exemptions on small packages below $800 in value, this is a big one for small products made abroad, many made of plastic, that are sold on sites like Ebay, Temu and Amazon. Expect more news to be flying in this week with his August 1st deadline fast approaching.
US Economic Data
The latest GDP numbers were released today, and the U.S. economy put up a solid 3% annualized growth for the second quarter, stronger than most had anticipated. Consumers opened their wallets, with spending rising 1.4% in Q2, up from the sleepy 0.5% pace in Q1. Still, when you zoom out, it’s been a sluggish stretch — those were the two weakest quarters for consumer spending since the pandemic hit.
When you dive into the numbers, things look a little softer. Core GDP, that’s real final sales to private domestic purchasers, cooled to grow just 1.2%, the slowest we’ve seen Q4 2022. Earlier this year, that number was closer to 2%, so there’s definitely a downshift in demand.
On the business side, spending hit the brakes too. After front-loading investments earlier this year to beat looming tariffs, companies dialed things back, with growth slowing to 1.9% from a red-hot 10.3% in Q1. Looks more like leveling out than a red flag, but worth watching as we progress through the second half of the year.
ADP Jobs report came back very positive showing private companies added 104,000 jobs in July compared to a loss of 23,000 jobs in June. A gain of 64,000 was estimated but this is another positive economic reading supporting that the US is economy is pretty resilient.
FOMC Rate Decision
Fed Chairman Powell announced that they will be holding rates flat at 4.25-4.5% after their meeting the past two days. This is much to Trump’s disappointment as he has been pressuring them to lower rates. Still it’s anticipated we’ll see 1-2 rate cuts by year's end, the next meeting is September 16-17. The Fed’s initiatives are to keep inflation in check and full employment. They are seeing inflation remain elevated with tariffs kicking in and employment remaining low, not much reason to cut based on that. They are determined to focus on those factors and remain independent of political pressure. A rate cut would surely spark investment from businesses and are part of the President’s overall strategy to bring manufacturing back to the US.
That was a long report, thanks for sticking with me. See you all on Thursday.
-Dominick Russo, CFA
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