US polyethylene exports likely to arrive in Asia- preferably China, SE Asia

09-Apr-15

US polyethylene exports were workable to Asia, with some US-based traders deeming China and Southeast Asia the more preferable destination for resin, as per sources in Platts. Asian polymer prices have risen in recent weeks on higher feedstock costs and supply shortages brought on by planned maintenance during the second quarter. While US PE continued to move to West Coast South America, Central America and the Mercosur region, some sources said they were getting better net backs to China, making it a preferred trade partner. US exports have found their way into Latin America for much of the year, as exporters find it difficult to compete in other global markets since H2-2014 as lower oil pushed resin prices down in Asia, the Middle East and Europe. But a tighter global market has made things more competitive for US resin, particularly with producer inventories rising in recent months, which has meant good availability for exporters on most grades of polyethylene, sources said. "Latin America is the lowest price in the world right now," a US-based trader source said, adding that Asia would be a more profitable option for sellers with the ability to move resin there. Freight rates from the US to China were talked at US$50-60/mt, with US routes to Brazil at US$65-85/mt cost, Peru at around US$100/mt and Central America around US$110/mt, per market feedback. While European markets remained tight in the wake of multiple production issues in the region, sources said exports from the US remained difficult because of duties and environmental regulations. One US-based trader said deals to Europe were possible, but others said Europe was more likely to buy resin from Korea because there would be no additional import fees.