April showers didn't bring much relief for North American resin buyers in May, as prices increased for most commodity resins.
Suppliers of most commodity materials remain challenged by demand trying to catch up with supply disruptions that began early last year. Some materials also still remain on force majeure sales allocation.
Regional prices for all grades of PE rose by an average of 5 cents per pound for May, according to buyers and market watchers contacted by Plastics News. Prices for high density PE had been up 7 cents in April, with prices for low and linear low density PE up 9 cents.
Supplies of the material remain tight as producers look to recover from outages caused by Winter Storm Uri in February. LDPE and LLDPE prices now are up a total of 33 cents so far in 2021 and are up 53 cents since January 2020. HDPE prices are up 31 cents and 51 cents in the same comparisons. The May price hike marked the sixth consecutive month that prices in the region were up.
PE production in May was affected by operating issues at plants operated by Dow Inc., Braskem America and Nova Chemicals, according to industry sources. In a recent interview with Plastics News, market veteran Robert Bauman said that the PE market essentially lost 30-40 days of production after the ice storm and that buyers "are still scrambling for resin."
"The [PE] market essentially needs a billion pounds back," said Mike Burns, a PE market analyst with Resin Technology Inc. in Fort Worth, Texas. "Producers need to have 90 days without a disruption, but that hasn't happened yet."
On a recent webinar, Brian Pruett, senior vice president with the Chemical Data Inc. unit of research firm ICIS of Houston, said the PE market might see one or two additional increases this year before the market potentially enters into a price correction.
North American PE makers now are seeking increases ranging from 5-7 cents per pound for June.