The rise of the resins continued in April as tight supplies of materials continued to be a challenge for processors across North America.
Regional selling prices for polyethylene, PVC, polystyrene and PET bottle resin all were up for the month. Average polypropylene resin prices were down because of operating conditions, while demand for that resin remained high.
Regional prices for low and linear low density PE surged an average of 9 cents per pound since April 1, with high density PE prices up 7 cents. Supplies of the material remain tight as producers look to recover from outages caused by Winter Storm Uri in February.
The April HDPE price increase at first was believed to be 9 cents, but the market eventually settled up to 7. This change is being shown as a 2-cent downward correction on this week's Plastics News resin pricing chart.
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.
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.
According to Burns, 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.
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.
Nova's force majeure covers all PE resins produced in the Sarnia region. A 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.