Supply pressures related to Hurricane Harvey have sent North American prices for polyethylene, polypropylene and polystyrene resin up since Sept. 1.
PE prices in the region have moved up an average of 4 cents per pound, with PP prices increasing 7 cents and PS prices ticking up 3 cents, according to market sources contacted recently by Plastics News.
Most resin production on the Texas coast has restarted or is in the process of doing so after Harvey brought heavy rains and flooding to the region beginning on Aug. 25. But many plants are having difficulty sourcing feedstock needed to make resin and in dealing with backlogs on train and truck freight needed to make shipments.
The PE pricing situation has been complicated by a series of increases released for different dates by different suppliers. DowDuPont Inc. and LyondellBasell Industries had a Sept. 1 enforcement date for the 4 cents, while several others had Sept. 15 and a few opted for Oct. 1, with no announced date in September.
Most market sources contacted by Plastics News indicated that PE buyers who didn't see the 4-cent increase in September likely would see it by Oct. 15. As a result, Plastics News is showing the 4-cent increase on this week's resin pricing chart.
Nova Chemicals and several other PE makers now have announced additional 3-cent increases for Oct. 15. Market sources said that move has a good chance of being successful, since some suppliers continue to operate under force majeure sales limits. Spot prices for PE had jumped 10 cents or more in the immediate aftermath of the storm.
One PE buyer in the U.S. Midwest said sourcing material has been difficult, but he still was able to joke about the situation.
"I guess that's what I get for buying resin from plants [whose names] ... end in 'bayou,'" he said.
The most impacted regional PE production site still appears to be Chevron Phillips Chemical's Cedar Bayou plant in Baytown, Texas, which makes high, low and linear low density PE. The PetroChem Wire consulting firm said that site experienced damaging floods as the nearby bayou crested several feet above what is considered a 500-year flood event.
PCW added that the plant, which makes numerous blow molding and rotational molding grades, is not expected to restart until at least November. Market sources also told Plastics News that the Cedar Bayou plant had been impacted. Officials with CP Chem in The Woodlands, Texas, have declined to comment.
One resin supplier said Harvey and Hurricane Irma, which hit Florida on Sept. 8, has caused "a nationwide shortage of available truck-load and bulk-truck capacity." Road freight demand is returning to Houston, according to the IHS Markit consulting firm, as immediate emergency relief gives way to longer-term rebuilding needs.
Storm-related PE supply issues also had helped a 3-cent August increase take hold, after it initially was thought to be unsuccessful. Prior to that August hike, regional PE prices had been flat for two consecutive months.
U.S./Canadian PE sales were mixed in the first eight months of 2017, according to the American Chemistry Council. Sales of HDPE were down more than 4 percent, as a domestic sales gain of almost 3 percent was wiped out by a drop of 27 percent in exports.
LDPE sales ticked up almost 2 percent in those eight months, with a domestic sales drop of more than 1 percent negated by an export sales gain of more than 12 percent. In LLDPE, regional sales grew almost 1 percent, as domestic growth of 3 percent was lowered by an almost 8 percent drop in exports.
