Demand continues to hit PE, PVC resin prices

North American prices for polyethylene and suspension PVC resins are moving again, as suppliers struggle to meet high demand.

Prices for all grades of PE rose by an average of 5 cents per pound in 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 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 time frame. The May price hike marked the sixth consecutive month that prices in the region were up.

Many PE makers still are operating under force majeure sales limits or other types of sales allocations, although producers are approaching pre-February production levels, sources said. Production in May was affected by operating issues at plants operated by Dow Inc., Braskem America and Nova Chemicals, according to industry sources.

"The 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.

"Buyers are getting what they need, but it isn't easy, and it's tough to get labor," he added. "And consumer demand remains very strong. It looks like it's going to move from grocery stores to bars and restaurants as things open up [from the pandemic]."

North American PE makers now are seeking increases ranging from 5-7 cents per pound for June.

PVC prices jumped 3 cents in May after rising 4 cents in April. Tight supplies and strong demand from the construction marker drove prices higher.

PVC makers are continuing to recover from the February storm as well. Supplies of stabilizers and other additives needed to make PVC compounds remain particularly tight. Market sources told Plastics News that PVC production in May at plants operated by Westlake Chemical Corp. and Formosa Plastics Corp. USA was affected by their ability to source chlorine feedstock.

Prices for suspension PVC now are up 21 cents so far in 2021 and up a net of 36.5 cents per pound since January 2020. PVC makers are seeking increases of 3 cents for June.

The construction market, which accounts for around 60 percent of U.S./Canadian PVC demand, has been particularly strong in early 2021. About 55 percent of construction-based PVC demand comes from rigid pipe and tubing.

U.S. housing starts were at a 1.57 million annual rate for April, according to the Census Bureau. That number was down almost 10 percent vs. March but up almost 70 percent vs. April 2020, when the COVID-19 pandemic was impacting construction activity.