UPDATED — Supply concerns in the wake of Hurricane Harvey have sent North American prices for polyethylene resin up by an average of 3 cents per pound.
The Aug. 1 increase initially was thought to be unsuccessful, but took hold after the storm made landfall on the Texas coast on Aug. 25. Large amounts of resin and feedstock production remain down as a result.
The 3 cent hike for all grades of high, low and linear low density PE will be shown on next week's Plastics News resin pricing chart. The chart also will show a 0.5 cent increase on polypropylene and a 2.5 cent increase on PET bottle resin. Those hikes were in place for August before the storm hit.
As of Sept. 1, S&P Global Platts reported that 13 Texas ethylene units were down and that four others were operating at reduced rates. Consulting firm PetroChem Wire estimated that at peak storm impact, just over 60 percent of U.S. ethylene production was out of commission.
Chevron Phillips Chemical has declared force majeure sales limits at its three PE production sites in Texas. LyondellBasell Industries has done the same at four PE sites, and Formosa Plastics Corp. USA has taken the same action in Point Comfort.
Formosa also has declared force majeure for PP and PVC in Point Comfort. Oxy Vinyls has taken that step at two PVC sites, as has Ineos at two PP sites and Total Petrochemicals at its PP unit in La Porte.
Restart procedures have begun at several of these locations. Market sources have said resuming production will be challenged by the effects that flooding has had on infrastructure, including electricity, highways and railroads.
Prior to the August hike taking hold, regional PE prices had been flat for two straight months after rising 3 cents in May. Some regional PE makers now have announced price increase of 4 cents for September. ExxonMobil Chemical Co. has announced a 4 cent increase effective Sept. 15, and Ineos Olefins & Polymers USA announced a 4-cent hike for Oct. 1.
U.S./Canadian PE sales were mixed in the first seven months of 2017, according to the American Chemistry Council. Sales of HDPE in the region were down 3 percent in that period, as a domestic sales gain of almost 4 percent was wiped out by a drop of 26 percent in export sales.
LDPE sales in the region ticked up 2 percent in those seven months, with a domestic sales drop of 1 percent negated by an export sales gain of more than 11 percent. In LLDPE, regional sales grew almost 2 percent, as domestic growth of more than 4 percent was lowered by a 6 percent drop in export sales.
The 0.5 cent PP increase for August was the second consecutive hike by that amount. Prices for that material had been flat in June after sliding down 7.5 cents in May and 6 cents in April.
North American PP sales were not robust in the first seven months of 2017, increasing almost 1 percent vs. the same period in 2016. Domestic PP sales grew 2 percent in that period, while export sales slipped 27 percent.
The 2.5 cent PET increase for August followed a 1.5 cent hike in July. Both moves were the result of tighter supplies and slightly higher feedstock costs, according to market watchers contacted by Plastics News.
Prices for PET bottle resin now have increased for three straight months, including a 0.5 percent rise in June. Prior to that, prices had declined for three straight months, totaling 3.5 cents in decreases.
Some North American PVC makers now are seeking increases of 5 cents per pound for September, due largely to storm impact on supply of resin and raw materials.
Polystyrene maker Americas Styrenics is seeking a 3 cent per pound increase effective Sept. 1. Some production of benzene — which is used to make PS feedstock styrene monomer — have been affected by the storm.
