September — as Earth, Wind & Fire once sang — was a time for dancing and not for cloudy days. Do you remember?
North American resin makers would use that description for September 2016, as they were able to raise prices for polyethylene, polypropylene, solid polystyrene and PET bottle resin.
Selling prices for PE in the region jumped by a nickel after being flat for four straight months. PE supplies have tightened as a result of several planned maintenance turnarounds and unplanned outages in the region. Companies that have had production issues for PE or ethylene feedstock at Gulf Coast locations in recent months include LyondellBasell Industries, ExxonMobil Chemical Co. and Westlake Chemical Corp.
Lower PE inventories also played a role in the September hike, according to Mike Burns, PE market analyst at Resin Technology Inc. in Fort Worth, Texas. He added that, without further supply disruptions, regional PE prices likely are at their peak for the year.
“PE suppliers will desperately fight to keep any margin gains and might hold on to the [September] increase through December as they did last year,” Burns said.
U.S./Canadian PE demand growth was mixed in the first eight months of 2016, according to the American Chemistry Council in Washington. Regional sales of high density PE were up more than 4 percent, while sales of linear low density PE grew more than 1 percent and those of LDPE declined by almost 1 percent.
Domestic HDPE sales growth of almost 2 percent was boosted by export sales growth of almost 15 percent in the eight-month period. For LLDPE, a domestic sales jump of more than 2 percent was lessened somewhat by a drop of almost 2 percent in the export market. The regional LDPE field saw domestic sales growth of 2 percent wiped out by a drop of almost 10 percent in export sales.
With the 5-cent September hike, regional PE prices now are up a net of 9 cents per pounds since Jan. 1, according to the Plastics News resin pricing chart.