North American prices for polyethylene, PVC and solid polystyrene have continued to rise in 2021, with each material showing increases since April 1.
Selling prices for several engineering resins also have climbed since the start of the year. All of these changes are shown on this week's Plastics News resin pricing chart.
Regional PE prices surged an average of 9 cents per pound since April 1. Supplies of the material remain tight as producers look to recover from outages caused by Winter Storm Uri in February.
PE prices now are up a total of 28 cents so far in 2021 and are up 48 cents since January 2020. PE makers are seeking increases of 5-6 cents per pound for May.
Many producers still are operating under force majeure sales limits or other types of sales allocations. On average, North American PE processors are receiving 70 percent of their requested purchases, according to sources contacted by Plastics News.
"I'd say polyethylene supplies are just barely improving," one market source told PN. "It's still tight and some grades are very tight, like [high density] PE for blow molding."
Mike Burns, a PE market analyst with Resin Technology Inc. in Fort Worth, Texas, said that allocations are moving higher than 70 percent, but that demand is still exceeding supply.
"Processors are getting what they need," he added. "They're not getting any extra rail cars, but they don't have to turn off their machines."
Although North American PE makers have continued to export to Latin America, Burns said they've cut back on exports to other parts of the world. He added that regional PE makers are likely to stay on sales allocations "for as long as they can," and that even when supply improves, high prices might discourage processors from building inventory.
"Processors don't want $1 resin in their silos if prices are going lower," Burns said.
David Barry, a PE market analyst with PetroChem Wire in Houston, said that North American PE operating rates are currently in the 80s and might be approaching 90 percent.
"Producers could be close to full allocations by the end of May," he added.
On a recent conference call, Dow Inc. CEO and Chairman Jim Fitterling said that all of Dow's production units that were affected by the storm are back online. Dow's production of PE, ethylene and related materials had been impacted.
Fitterling added that 2021 "is looking like a year in which we see 13 months of demand and 11 months of supply." Dow's Packaging & Specialty Plastics unit, including PE resin, posted sales of almost $6.1 billion in the first quarter, up almost 32 percent vs. the year-ago period.
On the call, Fitterling said that Dow "had growth in plastics and packaging even through COVID. … People underestimated how much growth was there." He also cited several factors that could boost markets served by Dow, including a return to air travel, expansion in global manufacturing, continued government stimulus, vaccine rollouts and infrastructure legislation.
In the near term, North American PE supplies could be further tightened by a mechanical failure at a Nova Chemicals Corp. production site in Ontario, which has led the firm to place force majeure sales limits on PE resins.
A Nova spokesperson said that the firm "has experienced a mechanical failure beyond our control at our Corunna ethylene cracker in the Sarnia, Ontario, region which supplies ethylene to our polyethylene facilities in that region."
Nova's force majeure covers all PE resins produced in the Sarnia region, including low density PE, HDPE and the Sclairtech products made at the firm's St. Clair River Site. The spokesperson said there were no injuries or environmental impacts from the event, but that Nova didn't know how long the force majeure would be in place.