The impact of COVID-19 was felt in North American commodity resin markets in April, with most materials seeing prices decline.
Economic activity across the region has plummeted as nonessential businesses closed and consumers stayed home as much as possible to prevent the spread of the virus. Major job cuts across many industries also have dampened consumer spending.
On April 29, the U.S. Bureau of Economic Analysis reported that gross domestic product decreased by 4.8 percent in the first quarter. As of May 5, more than 260,000 people have died from COVID-19 around the world.
Regional prices for all grades of polyethylene resin fell an average of 4 cents per pound in April. Rising demand for PE in packaging and medical applications was tempered by demand drops in other sectors, such as construction.
North American PE prices had been flat in March, although producers tried to push a 4-cent hike through. Changing market conditions related to COVID-19 eventually led them to suspend that attempt.
PE supplies will be affected by Dow Inc.'s decision to idle three PE resin plants for at least one month in response to the COVID-19 crisis.
The plants being idled are in Freeport and Seadrift, Texas; and Bahia Blanca, Argentina. Dow also is idling two elastomers plants in Plaquemine, La. In total, the plants represent about 10 percent of Dow's global capacity for those materials.
All of these moves are being made to balance production with demand, officials said. In an email to Plastics News, a Dow spokesperson said that the firm is not announcing layoffs associated with the temporary closings.