Skip to main content
Sister Publication Links
  • Sustainable Plastics
  • Plastics News China
  • Rubber & Plastics News
logo-pn-color
Subscribe
  • Login
  • Register
  • Subscribe
  • News
    • Processor News
    • Suppliers
    • More News
    • End Markets
    • FYI Charts
    • LSR World
    • Multimedia
    • NPE2021
    • K Show
    • Special Reports
    • Top materials of injection molders
      Recycled PET use by product category
      US PET, flexible packaging desintations
      Global fluropolymers additives market: CAGR
    • NPE exhibitors question handling of deposits for canceled trade show
      Exhibitors back NPE cancellation: ‘We couldn't take that risk'
      NPE2021 canceled as in-person event
      NPE reviews its options as pandemic prompts exhibitor to exit
    • Injection Molding
    • Blow Molding
    • Film & Sheet
    • Pipe/Profile/Tubing
    • Rotomolding
    • Thermoforming
    • Recycling
    • Machinery
    • Materials
    • Molds/Tooling
    • Product news
    • Design
    • What Keeps You Up At Night
    • Mergers & Acquisitions
    • Sustainability
    • Public Policy
    • Material Insights Videos
    • Numbers that Matter
    • Polymer Points Live
    • Automotive
    • Packaging
    • Medical
    • Consumer Products
    • Construction
    • Videos
    • Galleries
    • Podcasts
    • CEO Issue
    • Best Places to Work
    • Processor of the Year
    • Rising Stars
    • Women Breaking the Mold
  • Opinion
    • The Plastics Blog
    • Kickstart
    • Heavy Metal
    • One Good Resin
    • BRICS and Plastics
    • All Things Data
    • Viewpoint
    • From Pillar to Post
    • Perspective
    • Mailbag
    • Perspective: Making the best of working from home
      Nypro's Gordon Lankton left the plastics industry a better place
      Recognizing Plastek Industries for all-around excellence
      Let's look forward, rather than back, to mark COVID anniversary
    • Kickstart: Yes, this 'paper' bottle is really plastic, and yes, it's a bad look
      Kickstart: Plastics ready to take flight on Mars
      Kickstart: Let's hear it for leftovers
      Kickstart: Big data, big bowls and consumer packaging
    • Heavy Metal: Coronavirus edition, plus the work of working from home
      Don't put off succession planning
      What's a good gift for your cobot? Batteries?
      Here's some big ideas to mull over the holidays
    • PE resin trends highlighted in Shell report
      Dow's Lowry honored by World Economic Forum for sustainability work
      Africa impacts new colors from Ampacet
      Plaskolite marches into madness with its own online bracket
    • Climate debate in Washington increasingly includes plastic
      There was no choice but canceling NPE still a big deal
      The business case for producer responsibility
      Think divided government stalls plastics legislation? Think again
    • Want prices? Introducing historical resin pricing, now available in a downloadable form
      A new annual ranking: Top processor gains
      Thermoformers: Would you believe a 12 percent gain?
      Just how big is thermoforming in North America?
    • Working from home: Rugrats edition
      Nypro's Gordon Lankton left the plastics industry a better place
      Let's look forward, rather than back, to mark COVID anniversary
      Virtual pitfalls derail exhibits for builders' trade show
    • PEX pipe maker Uponor donates $30,000 for Texas storm relief
      Virtual pitfalls derail exhibits for builders' trade show
      PPI puts $200 bounty on exhumed HDPE conduit
      Raise the roof: Housing starts hit a 12-year high
    • Perspective: Making the best of working from home
      Perspective: The Materials Wars: Is plastic actually better?
      Perspective: Plastics manufacturers — a surprising contribution to sustainability
      Plastics industry business owners: Listen to your future workforce
    • Mailbag: Additional fees for electric vehicles ‘unfortunate'
      Mailbag: Where's the plastics industry's response to critics?
      Mailbag: Manufacturers struggling to follow COVID-19 safety rules
      Modernizing recycling infrastructure will benefit businesses as well as the environment
  • Shop Floor
    • Blending
    • Compounding
    • Drying
    • Injection Molding
    • Purging
    • Robotics
    • Size Reduction
    • Structural Foam
    • Tooling
    • Training
    • Maintenance can ensure efficient blender operation
      Dosing: Perfect for adding color
      Blending vs dosing: What you need to know
      Going low or high: Comparing volume
    • Colors and custom compounds
      In the laboratory: Compounding solutions
      Recycling content: Resins going ‘green’
      Compounding: Glass and other fillers
    • Dryer maintenance: Don’t err with air
      Dryers: Options for a shop’s process
      Dryer installation: Going central?
      Resins: Hygroscopic or non-hygroscopic
    • Electric injection molding presses: Efficiency is key
      Hydraulic injection molding machines
      Proper maintenance can prevent downtime
      Hybrid injection molding machines
    • Purging Hot runners: Open or closed methods
      Purging extrusion machinery
      Purging extrusion blow molding machines
      Purging: Chemical, abrasive and non-abrasive
    • Controls, special applications boost production, profitability
      Robot maintenance key for smooth operation
      High-speed robots: A rapid way to increase efficiency
      Robots: Every shape and size
    • Maintenance: Key for efficiency
      Shredders: Plastic in pieces
      Safety first for size reduction
      Granulators: The right fit
    • Video: Structural foam molding
      Structural foam molding: Flexibility for processors
    • Mold inventory: How many molds does a shop have?
      Molds: Innovation
      Mold changeover: Saving time and money
      How molds work
    • Labor: Apprenticeships may provide answer
      Internships: Solving the skills gap in-house
      College training, programs
      Lean Six Sigma: Transforming business operation
  • Events
    • Plastics News Events
    • Industry Events
    • Livestreams/Webinars
    • Ask the Expert
    • Polymer Points Live
    • Reifenhäuser Technologies Livestreams
    • 2020 Caps & Closures Library
    • Plastics in Healthcare Library
    • Women Breaking the Mold Networking Forum Library
    • Polymer Points Live - April 2021
      Polymer Points Live - February 2021
      Polymer Points Live - January 2021
      Polymer Points Live - December 2020
    • Plastics in Healthcare 2020
    • Plastics News Executive Forum
    • Plastics in Automotive
    • Plastics News Caps & Closures
    • Plastics in Healthcare
    • Women Breaking the Mold Networking Forum
  • Resin Prices
    • All Resins
    • Commodity TPs
    • High Temp TPs
    • ETPs
    • Thermosets
    • Recycled Plastics
    • Historic Commodity Thermoplastics
    • Historic High Temp Thermoplastics
    • Historic Engineering Thermoplastics
    • Historic Thermosets
    • Historic Recycled Plastics
  • Rankings
    • Injection Molders
    • Blow Molders
    • Film Sheet
    • Thermoformers
    • Pipe Profile Tubing
    • Rotomolders
    • Mold/Toolmakers
    • LSR Processors
    • Recyclers
    • Compounders - List
    • Association - List
    • Plastic Lumber - List
    • All
  • Data Store
  • Directory
  • More+
    • Classifieds
    • Digital Edition
    • Newsletters
    • Sponsored Content
    • KraussMaffei Sponsored Content
    • ENGEL Sponsored Content
    • White Papers
    • Processor of the Year submissions
    • Sponsored By Bandera
      Bandera US was born for the North American market
      Sponsored By Ensign Equipment
      Filling systems customized for any process or budget need
      KraussMaffei
      Sponsored By KraussMaffei
      KraussMaffei retools in US with investment from parent ownership
      Sponsored By Mitsubishi
      Innovative new technology from Mitsubishi Engineering-Plastics Corporation helps reduce emission footprints
    • KraussMaffei
      Sponsored By KraussMaffei
      KraussMaffei Retools in US with investment from Parent Ownership
    • Sponsored By ENGEL Machinery
      Tailored maintenance for injection molding machines and robots
      Sponsored By ENGEL Machinery
      Improve maintenance efficiency with e-connect.monitor
      Sponsored By ENGEL Machinery
      Maximum precision for lowest shot weights
      Sponsored By ENGEL Machinery
      Even more cost effectiveness for small precision parts
    • Shell Polymer
      Sponsored By Shell Polymers
      Food and beverage trends impacting the polymer industry
      Sponsored By Conexiom
      Use Sales Order Automation to free up time for CSRs to focus on customers, not manual entry
    • Place an Ad
    • Sign up for Early Classified
MENU
Breadcrumb
  1. Home
  2. News
August 20, 2018 02:00 AM

HDPE, LLDPE drive first-half gains in U.S./Canadian resin sales

Frank Esposito
  • Tweet
  • Share
  • Share
  • Email
  • More
    Print
    Jessica Jordan

    The impact of new North American polyethylene resin capacity began to be felt in sales totals for the first half of 2018, with both high and linear low density PE posting big gains.

    U.S./Canadian sales of HDPE jumped 8.8 percent in that six-month period, according to the American Chemistry Council, with LLDPE sales booming 16.3 percent. Exports played a big role in this growth, with LLDPE exports up an astonishing 60.2 percent and HDPE exports leaping 18.9 percent.

    Domestic market growth for those materials also exceeded that of U.S. GDP. HDPE sales into the domestic market were up 6.5 percent in the first half, with domestic LLDPE sales up 4 percent.

    Among major HDPE markets, sales into gas pipe were up 23 percent, with water pipe up 16 percent for the half. In end markets for LLDPE, sales of the material into shipping sacks were up 10 percent.

    North America has added more than 6 billion pounds of annual PE production capacity since mid-2016 through major expansions from Nova Chemicals Corp., Dow Chemical Co., ExxonMobil Chemical Co. and Chevron Phillips Chemical. In total, North American PE production capacity is expected to add 26 billion pounds between 2017 and 2022.

    The discovery of newfound supplies of shale-based natural gas in the region in the last decade have made these expansions possible. Most of this new capacity has been in the form of HDPE and LLDPE.

    U.S. PE exports "can ramp up very quickly when world crude oil prices rise as they did in the first half of 2018 compared to the same months in 2017," said Phil Karig, managing director of the Mathelin Bay Associates LLC consulting firm in St. Louis.

    "Crude oil prices were up over 30 percent year over year, while U.S. natural gas prices were mostly down during the same time period," he added. "As a result, many foreign PE buyers found U.S. PE prices attractive, while U.S. PE producers had less reason to lower domestic prices, even in the face of new production capacity."

    Esteban Sagel, principal of the Chemical & Polymer Market Consultants consulting firm in Houston, said that "looking at PE, the domestic growth rates would be reflective of a strong domestic market, which I believe is the case."

    "The economy is improving, employment is up and confidence is high," he added. "Growth in pipe in HDPE is understandable, as we work in a lot of shale-related infrastructure."

    Harvey hits pricing

    In PE pricing, strong demand and the unexpected prolonged effects of Hurricane Harvey into the spring supported higher post-hurricane price increases, according to Mike Burns, PE market analyst with Resin Technology Inc. in Fort Worth, Texas.

    "Resin processors who expected Q1 discounts were surprised when prices increased in February and have lasted for the most part into the summer," Burns said.

    Burns added that with hurricane-related supply issues resolved and new capacity running at better rates, suppliers will have to rely heavily on a strong export market in the second half of 2018.

    "Exports may need to increase as much as 10 percent over the three-year average of 20 percent to maintain a balanced North American supply," he said. "And recent tariffs talks may disrupt the flow of exports until the direction is certain."

    An abundant supply of PE "is contributing to U.S. resin export growth in particular," according to Paul Bjacek, market analyst with the Accenture Research in Houston. "This will pull up [LLDPE] shipping sacks as well, as plastics are typically packed in shipping sacks for loading into overseas containers."

    First-half sales for other commodity resins represented a mixed bag. PVC sales posted solid gains, while sales of LDPE and polypropylene essentially were flat and sales of solid polystyrene declined.

    U.S./Canadian PVC growth of 5.5 percent was powered by export growth of 17 percent. Sales of the material into the domestic market ticked up 0.6 percent. Among major end markets, sales of PVC into extruded windows and doors surged upward by 31 percent in the first half.

    Construction growth

    The PVC market "is, has been and will continue to be driven by various housing market applications such as vinyl siding, windows and drain and waste pipe," Mathelin Bay's Karig said. U.S. housing starts "were strongly up year over year through May, and though they were down in June, there was more than enough momentum to keep U.S. PVC sales strong during the first half of 2018."

    PVC export sales "also benefited from low-cost natural gas, making U.S. producers competitive in the world market, as well as from continued growth in the global economy, including housing," he added. "Looking forward, the big question marks are whether tariff spats and elevated oil prices will cause global growth rates to begin to cool."

    Construction has been performing relatively better than manufacturing in the first half, Accenture's Bjacek said, with overall construction spending rising 5 percent. This trend should help explain the strong performance of PVC in construction applications, he added.

    LDPE sales ticked up 0.9 percent for the half, as a 0.4 percent export loss weakened domestic growth of 1.4 percent. The nonpackaging film end market, including retail bags and trash and can liners, grew 7 percent.

    For PP, North American sales dipped 0.5 percent. A 23.8 percent decline in export sales countered a gain of 0.2 percent in the domestic market. Among major end markets, sales of PP into oriented film were up 17 percent and into injection molded caps and closures were up 7 percent.

    Karig said that the PP market "was very much a mirror image of the PE market in the first half of 2018 as it has been for most of the last few years."

    PP producers "found themselves suffering from elevated feedstock costs and limited feedstock supply," he explained, "while foreign producers stand ready to ship PP to the U.S. whenever U.S. producers attempt to recover their cost increases or try to increase their margins."

    PS slides

    U.S./Canadian solid PS sales had a very difficult first half, with overall sales sliding 5.5 percent. Export growth of 19 percent allowed for a slight improvement on a domestic sales slump of 6.1 percent. Sales of solid PS to resellers and distributors provided a bright spot by growing 10 percent for the half.

    The resin statistics also reflect a 4.9 percent first-half increase in consumption of nondurable goods, which "tend to do relatively well throughout economic cycles," according to Bjacek.

    However, he added, the weaker performance of PP and PS is likely related to their greater share of demand in durable goods, which rose slightly less — 4.6 percent — during that time. U.S. auto production is a notable area of weakness, Bjacek said, declining by 13 percent in this period and likely contributing to weaker PP sales.

    Commenting on overall resin sales in the region, Bjacek said that strong resin sales data is linked primarily to robust economic growth, with U.S. real GDP rising over 4.1 percent in the second quarter. In addition, he added, growth is contributing to stronger world demand, as U.S. GDP accounts for more than one-fifth of world GDP.

    But "a key risk," according to Bjacek, is the lack of consistently strong durable goods production. "Consumers buy less durable goods when there is uncertainty," he said. "Any declines there can signal the beginnings of a downturn. Producers should watch durable figures and be actively pursuing stronger growth applications, as well as financially strong customers, to protect themselves in a downturn."

    Letter
    to the
    Editor

    Do you have an opinion about this story? Do you have some thoughts you'd like to share with our readers? Plastics News would love to hear from you. Email your letter to Editor at [email protected]

    Get our newsletters

    Staying current is easy with Plastics News delivered straight to your inbox, free of charge.

    Subscribe today

    Subscribe to Plastics News

    Subscribe now
    Connect with Us
    • LinkedIn
    • Facebook
    • Twitter
    • Instagram

    Plastics News covers the business of the global plastics industry. We report news, gather data and deliver timely information that provides our readers with a competitive advantage.

    logo-pn-color
    Contact Us

    1155 Gratiot Avenue
    Detroit MI 48207-2997

    Customer Service:
    877-320-1723

    Resources
    • About
    • Staff
    • Editorial Calendar
    • Media Kit
    • Data Store
    • Digital Edition
    • Custom Content
    • People
    • Contact
    • Careers
    • Sitemap
    Related Crain Publications
    • Sustainable Plastics
    • Rubber & Plastics News
    • Urethanes Technology
    • Plastics News China
    • European Rubber Journal
    • Tire Business
    Legal
    • Terms and Conditions
    • Privacy Policy
    • Privacy Request
    Copyright © 1996-2021. Crain Communications, Inc. All Rights Reserved.
    • News
      • Processor News
        • Injection Molding
        • Blow Molding
        • Film & Sheet
        • Pipe/Profile/Tubing
        • Rotomolding
        • Thermoforming
        • Recycling
      • Suppliers
        • Machinery
        • Materials
        • Molds/Tooling
        • Product news
        • Design
      • More News
        • What Keeps You Up At Night
        • Mergers & Acquisitions
        • Sustainability
        • Public Policy
        • Material Insights Videos
        • Numbers that Matter
        • Polymer Points Live
      • End Markets
        • Automotive
        • Packaging
        • Medical
        • Consumer Products
        • Construction
      • FYI Charts
        • Current FYI
      • LSR World
      • Multimedia
        • Videos
        • Galleries
        • Podcasts
      • NPE2021
      • K Show
      • Special Reports
        • CEO Issue
        • Best Places to Work
        • Processor of the Year
        • Rising Stars
        • Women Breaking the Mold
    • Opinion
      • The Plastics Blog
      • Kickstart
      • Heavy Metal
      • One Good Resin
      • BRICS and Plastics
      • All Things Data
      • Viewpoint
      • From Pillar to Post
      • Perspective
      • Mailbag
    • Shop Floor
      • Blending
      • Compounding
      • Drying
      • Injection Molding
      • Purging
      • Robotics
      • Size Reduction
      • Structural Foam
      • Tooling
      • Training
    • Events
      • Plastics News Events
        • Plastics News Executive Forum
        • Plastics in Automotive
        • Plastics News Caps & Closures
        • Plastics in Healthcare
        • Women Breaking the Mold Networking Forum
      • Industry Events
      • Livestreams/Webinars
      • Ask the Expert
      • Polymer Points Live
      • Reifenhäuser Technologies Livestreams
      • 2020 Caps & Closures Library
      • Plastics in Healthcare Library
      • Women Breaking the Mold Networking Forum Library
    • Resin Prices
      • All Resins
      • Commodity TPs
        • Historic Commodity Thermoplastics
      • High Temp TPs
        • Historic High Temp Thermoplastics
      • ETPs
        • Historic Engineering Thermoplastics
      • Thermosets
        • Historic Thermosets
      • Recycled Plastics
        • Historic Recycled Plastics
    • Rankings
      • Injection Molders
      • Blow Molders
      • Film Sheet
      • Thermoformers
      • Pipe Profile Tubing
      • Rotomolders
      • Mold/Toolmakers
      • LSR Processors
      • Recyclers
      • Compounders - List
      • Association - List
      • Plastic Lumber - List
      • All
    • Data Store
    • Directory
    • More+
      • Classifieds
        • Place an Ad
        • Sign up for Early Classified
      • Digital Edition
      • Newsletters
      • Sponsored Content
      • KraussMaffei Sponsored Content
      • ENGEL Sponsored Content
      • White Papers
      • Processor of the Year submissions