Drops in demand and feedstock costs related to COVID-19 sent prices for North American commodity resins down in April.
Economic activity across the region has plummeted as nonessential businesses closed and consumers stayed home as much as possible to prevent the spread of the virus.
Major job cuts across many industries also have dampened consumer spending. On April 29, the U.S. Bureau of Economic Analysis reported that gross domestic product (GDP) decreased by 4.8 percent in the first quarter.
Regional prices for all grades of polyethylene resin fell an average of 4 cents per pound in April. Rising demand for PE in packaging and medical applications was tempered by demand drops in other sectors, such as construction.
Prices for crude oil — a global price-setter for PE — also have tumbled. At the international level, Brent crude prices began the year at $66 per barrel but were at $20.50 in early trading April 29 for a decline of almost 70 percent. In the U.S., prices for West Texas Intermediate (WTI) crude fell from around $61 per barrel to $12.30 in the same comparison for a decline of almost 80 percent.
Liquid food applications — including milk — account for almost 9 percent of annual high density PE consumption in the U.S. and Canada. Other food-related markets account for another 2.5 percent. Food packaging film accounts for almost 18 percent of U.S. and Canadian low density PE consumption and almost 17 percent of the region's linear low density PE use.
North American PE prices had been flat in March, although producers tried to push a 4-cent hike through. Changing market conditions related to COVID-19 eventually led them to suspend that attempt.