Naples, Fla. — Upheaval in the polyethylene and polypropylene resin markets is keeping processors on their toes in 2022.
Market veteran Esteban Sagel covered these markets at the Plastics News Executive Forum in Naples. Sagel is principal of Chemical & Polymer Market Consultants (ChemPMC) in Houston.
"Before COVID, there was a lot of polyethylene coming on, and it was a question of where to sell it and how to export it," Sagel said. "Prices were expected to come down.
"Then in COVID, people were focused on survival. We had [PE] growth when people were expecting the opposite, and that led to higher prices."
Although inflation and environmental issues could affect PE demand moving forward, PE makers such as Shell, ExxonMobil and Nova Chemicals are continuing to add capacity. Sagel said although some of this new capacity might be delayed, domestic demand still won't be enough to absorb it, keeping emphasis on the export market. Exports of PE from North America "are up, but haven't quite recovered," he added.
The PP resin market "is a different story," according to Sagel, because PP makers "are skittish about the value chain." As a result, although some PP makers such as ExxonMobil and Inter Pipeline are adding capacity, those numbers are far less than those for PE expansions.
PP exports from North America remain down, he added, while more material has been coming in from outside the region.
Both the PE and PP markets are being affected by other factors, such as high freight and transport costs, reduced container availability, congestion at ports, high fuel prices and a difficulty in finding enough truck drivers.
Sagel added that "new consumer habits" such as food delivery, higher use of cleaning products and e-commerce could affect demand for PE and PP.
Environmental pressure resulting in bag bans also could play a role in demand patterns, he said, while inflation may result in reduced consumer spending.