Three commodity resins saw higher prices in North America in March, in spite of mixed signals from the region's economy.
Prices for all grades of high, low and linear low density PE were up 3 cents for the month, according to buyers and market watchers contacted by Plastics News.
The global PE market could be oversupplied by more than 50 billion pounds this year, according to a recent research note from John Richardson at the ICIS consulting firm. That's more than double the level of PE oversupply seen in recent years.
Higher container freight rates that had given other regions an advantage over China in the PE market now are going down as well, he said. These factors could lead to lower global PE prices.
"It was only ever a question of time — the time it took for freight rates to come down — before markets in China began to depress the rest of the world," Richardson said.
Claims of a booming Chinese economy in 2023 as it emerged from zero-COVID "failed to consider China's demographic, debt and real estate challenges — along with the record-high levels of global PE oversupply, much of which was due to events in China."
In March, some PE makers were trying to hold out for a 5-cent increase, but a major PE buyer in the Midwest U.S. told PN that wasn't likely to happen.
Market analyst Mike Burns said the increase was the result of "good demand and exports."
"The question is what's driving demand: restocking or consumer demand?" he added. "I think it's more likely that it's processor restocking."
PE supplies in the region are being affected by Nova Chemicals' declaration of force majeure on PE resins made at its plants in Sarnia, Ontario. In a March 21 letter to customers, officials with Nova in Calgary, Alberta, said the firm experienced "an unplanned outage" at its Corunna, Ontario, ethylene cracker. Officials said the estimated duration of the force majeure is unknown.
North American PE prices had been flat in February after a surprising upward swing in January moved prices up 3 cents. That hike came after prices had been flat for three consecutive months.