A battle over polyethylene resin prices throughout January has been decided in favor of producers.
North American commodity PE prices climbed 4 cents when suppliers were able to get the increase through, as some major buyers accepted the move and began sending out price increases of their own for PE finished goods.
Market sources said the move was based on PE makers' desire to increase margins after seeing prices fall throughout 2019. Supplies were readily available, even as producers looked to continue to export large amounts of new capacity added in recent years.
North American PE prices were flat in December after declining an average of 3 cents per pound in November. For full-year 2019, PE prices were down a net of 6 cents, according to the Plastics News resin pricing chart.
On the PE capacity front, another 1.8 billion pounds is set to come on line this year from Formosa Plastics Corp. USA. That's on top of almost 4.5 billion pounds added from three suppliers in 2019 and a total of more than 8 billion pounds added from four suppliers in 2017-18.
Looking past 2020, additions of more than 2 billion pounds total are slated for 2021-22. That amount does not include 3.5 billion pounds of capacity from Shell Chemical's massive project outside of Pittsburgh. Company officials have listed "early 2020s" as the start date for commercial production there.