Gravity caught up to the polyethylene resin market in October, sending North American prices down an average of 3 cents per pound.
Regional prices for PET bottle resin also continued to fall in October, sliding down another 4 cents per pound.
For PE, drivers for the decrease were sagging demand and rising inventory levels. Market sources said PE production was flat for October, even as inventories swelled by 235 million pounds. That brought total increase in PE inventories for the last three months to 750 million pounds.
Regional PE buyers had been looking for price drops in August and September, but resin makers were able to keep prices flat. Supply concerns over brief outages caused by Hurricane Beryl played a role in a 5-cent July price hike. But market forces changed direction in October.
Based on previous price moves, PE prices are up an average of 10 cents per pound so far in 2024. Exports of PE resin from the U.S. and Canada reached an all-time high of 44.7 percent of total production in 2023. The export rate was slightly higher at 45.4 percent in the first ten months of 2024.
By comparison, exports accounted for 23 to 28 percent of North American PE production in 2015-2018 and 33 to 39 percent of that amount in 2019-2022.
There's some concern among PE market watchers that tariffs on imports proposed by the incoming Donald Trump administration could impact U.S. PE exports by prompting other countries to place retaliatory tariffs on U.S. exports, including PE resin.
In the PET market, prices fell 4 cents in October after declining 3 cents in September and 2 cents in August. Prior to these declines, prices for the materials had been up 1 cent in both June and July. The October price drop followed lower prices for raw materials, including paraxylene and purified terephthalic acid.
Combined with previous increases and decreases, PET prices now are down a net of 8 cents so far in 2024. PET demand in North America has been in decline since August. Seasonal demand for bottled water and carbonated soft drinks often influence North American PET prices. Demand from those markets typically declines when weather cools in most of the region later in the year.
