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Highlights
Winter Storm Fern arrives with limited impact on resin production so far
Logistics heavily impacted from Fern with warehouses and port closed
January contract prices called up $.03/lb by some
PGP slightly trips lower
Resin Markets
Lots to talk about today but truthfully, the action was a little lighter than I expected it to be. Market participants were definitely trying to sort out if Fern was going to be a big issue or just another weather threat that came and passed without having significant impact on the resin industry.
We did get reports of a couple of preemptive shutdowns ahead of the storm, Exxon took precautions at its massive facility in Baytown. We also had reports of Ineos doing the same at their Gulf area facilities. The Houston power grid is holding up though, only minor outages have been reported. If you recall during Uri in 2021, one of the major issues was the failure of the Texas power grid, so far that does not seem to be a concern. It is a little early into all of this to tell if any long term outages will occur. You can refer to our Production Map to keep track of it all.
Polyethylene contracts are seeming to be settling up $.03/lb today, at least from one side, which seems spot on, we’ve been stating a partial implementation was possible for January. I’m not a fan that decreases are rarely observed but since the spot market turned in late October early November $.03/lb seems very fair. It’s lighter than the $.05-.07/lb in increases that producers were pushing for but there is momentum to seek the remainder in February. 2025 saw PE contracts increase a nickel in Jan, decrease $.03/lb in March, gain that 3 back in June before staying flat through the remainder of the year. Below is a chart of our PE Resindex prices over the same time frame, contract movements do not tell the whole story, savvy readers like yourselves know how important the spot market is in filling in the gaps.
Also, large leaps in contract prices can tend to kill demand, stepping the market up in a slower calculated way can have a more lasting effect. $.03/lb used to be the standard increases but over the past couple of years we’ve seen a nickel or higher become the standard increase. It's my believe that $.03/lb is palatable but a nickel or the full $.07/lb some producers are calling for could overheat things causing this current move to stall.
Monomer Market
Spot PGP traded many times today, all at $.32/lb for January delivery, down a quarter cent. We also saw second half of 2026 done at $.34/lb. January Ethylene was sold at $.1825/lb in Louisiana today, while Texas was unchanged. February Ethylene was brokered at $.1925/lb and March Ethylene at $.195/lb.
Winter Storm Fern
Winter Storm Fern has officially arrived bringing frigid temperatures and huge snow dumps all along the Midwest, Eastern and Southern parts of the US. As you can imagine this has brought on many logistics disruptions, shipping/trucking cannot help but be impacted by all this snow although Houston did avoid the fluffy stuff . The Port of Houston was also closed today but will be reopening tomorrow.
Many Houston area warehouses were closed today and others ran skeleton crews. The loading dock doors being open brings too much cold into Houston facilities not equipped for these conditions. It does warm up a touch throughout the rest of the week but gets back into the 20’s next weekend, forecast by weather.com.
Another fall out from this storm are front month Natural Gas prices, they reached as high as $7.439/mmBtu before falling back and closing at $6.80/mmBtu. At it’s peak today prices were up 140% from a week ago. This is certainly a short term develop as we’ve been pointing out, you can see second month March at just $3.898/mmBtu, still up 44% from a week ago. The volume has also shifted to March.
US Economic Data
Not much by the way of economic data being released these next two days so we’ll buzz through it, Durable Good orders for November came in at an increase of 5.3% which beat expectations of 4.5%. However, when you strip out transportation that number drops down to just .5%. Still, much better than October’s reading of -2.1%.
The outcome of Fern is still yet to be determined but we’ll keep you informed along the way. Thank you for reading and feel free to reach out with any questions, dominick@resintel.com. If you're new to Resintel and would like to get information like this everyday, schedule a demo of our platform and learn more about our plans.
-Dominick Russo, CFA
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