Diverse views whether US polyethylene export prices have bottomed hinder trade

16-Jul-10
Diverse views on whether US polyethylene export prices have bottomed are hindering trade, as per Platts. Most traders agree that supply of all grades of polyethylene is tight, with prices hovering at 45 cents/lb in railcars. Only 2 companies said they had bought HDPE blow molding at 43-44 cents/lb in railcars for export. Demand is muted at 45 cents/lb, partly because CFR markets in Latin America and Africa are importing at lower levels. A similar scenario is being witnessed for LLDPE. The lowest price talked in the export market is 45 cents/lb in railcars, but most traders say that lowest prices are hovering at 47 cents/lb in railcars. The persistently high offers from US producers made several traders wonder if product was tight and if this was the bottom of the market. If prices have bottomed, then it would be time to build inventory. Yet no traders polled were building inventory because of a lack of confidence in the bottom being realized. On the producer side, however, there was more optimism that this could be the bottom of the market and that prices were ready to at least be flat or rebound higher.
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