Polyethylene Market Update in North America, July 23, 2007

24-Jul-07
Volume: Much higher Price: Steady / weak The spot Polyethylene market was very busy this week. It began with some export demand that was held over the weekend, and on Monday a number of the Polyethylene orders were filled about $.015-.02/lb higher than late June prices. In seeking supply, we also flushed out plenty of resin offered at the $.05/lb increased price. No takers there, and as the week wore on, offer prices came down, which then allowed for more deals to conclude. The market ended the week heavily offered $.03-.05/lb over June, with good demand at flat to $.02/lb higher Spot Ethylene prices were mostly steady this week and have held firm above $.45/lb. With spot monomer costs up $.04/lb in July, expect a bump up in July Ethylene contracts. Polyethylene producers will want as much of a cost-push pass through that they can get. With monomer prices up and Natural Gas prices still slumping, supply chain margins have shifted upstream to the Ethane cracker. It will take part of the nominated Polyethylene price increase to help the resin segment of the business units to re-establish better margins. Some very large buyers are pushing to postpone as much of the July increase as possible. While they would like to simply roll over June prices, they will instead likely take something, but not the entire $.05/lb. Distributors claim that their normal business has been smooth, but not robust. With a large number of processors taking holidays in July, domestic demand is still questionable, but for some, a feeling towards higher resin costs could encourage a modest inventory build downstream. In the meantime, the spot Polyethylene market continues to bounce around this level, with more pronounced spreads developing between resin grades. HDPE-inj is the weakest of the bunch, with ample supplies keeping pressure on prices; good quality spot railcars have been available in the mid-high $.50s/lb. Exports for HDPE-inj are limited and there is plenty of packaged material in Houston. HDPE-blow molding has recently begun to loosen up; fresh railcars are shown in the very high $.50s/lb, without much difference whether shipping is domestic or to Houston for export. While railcars of fresh HMW film have returned to the spot market, best offers are into the mid- $.60s/lb, supported by a strong competing net-back earned through the export market. LLDPE-Butene is well supplied in the spot market, limiting prices to the mid $.50s/lb for bulk railcars, large inventories of packaged material also wait in the Houston area. LDPE-film grades are still much tougher to source, as yet another week has gone by with very little Fractional melt or High Clarity seen, although decent quantities of fair to high quality offgrade have come available, perhaps a sign that production issues are beginning to resolve. (The Plastics Exchange)
  More News  Post Your Comment
{{comment.Name}} made a post.
{{comment.DateTimeStampDisplay}}

{{comment.Comments}}

COMMENTS

0

There are no comments to display. Be the first one to comment!

*

Name Required.

*

Email Id Required.

Email Id Not Valid.

*

Mobile Required.

Email ID and Mobile Number are kept private and will not be shown publicly.
*

Message Required.

Click to Change image  Refresh Captcha