Regional polyethylene prices were flat in February after moving up 5 cents in January. Attempts by PE makers to keep momentum going with a second consecutive increase were unsuccessful.
Prices also had been flat in the last two months of 2024 after declining 3 cents in October. Overall, PE prices increased an average of 10 cents per pound during 2024.
Exports of PE resin from the U.S. and Canada reached an all-time high of 46.6 percent of total production in 2024. That's almost 2 percent higher than the previous high reported just last year. In the first two months of 2024, that number declined slightly to 45 percent.
There's some concern among PE market watchers that tariffs on imports proposed by the Trump administration could affect U.S. PE exports by leading other countries to place retaliatory tariffs on U.S. exports, including PE resin.
In a recent email to PN, Esteban Sagel, principal with Chemical & Polymer Market Consultants in Houston, said the possibility of counter tariffs "compounds the challenges U.S. [PE] producers already face if the U.S. government proceeds with its trade war." He added that when factoring in more than 2 billion pounds of annual PE exports to Canada, the equivalent of the annual production of six world-scale PE plants "is at risk."
"To remain competitive, U.S. [PE] exporters will likely have to absorb the additional tariffs rather than pass them on to PE buyers," Sagel said. "Otherwise, they risk losing market share to Middle Eastern suppliers, particularly in Europe, where cost-advantaged Middle Eastern producers are well positioned to take their place."
According to Sagel, at least one Canadian PE maker doesn't plan to pass the tariffs on to buyers at present, believing the tariffs will be short-lived and will serve as a negotiating tool for a renegotiation of the USMCA trade agreement.
"However, if tariffs become permanent, Canadian producers will have strong incentives to diversify their markets — a shift that would require infrastructure investments but could ultimately displace U.S. producers in Europe," he said.
In the PET market, North American bottle resin prices were flat in February after jumping 4 cents in January. Prices had dropped a total of 11 cents in the last five months of 2024. The January increase had followed higher demand as beverage makers build inventory in advance of warmer weather, as well as higher prices for raw materials, including paraxylene and purified terephthalic acid. PET prices were down a net of 10 cents in 2024.
Polystyrene prices in the region were flat in February after moving up 3 cents in January. PS prices also were flat in the last two months of 2024.
Prices for benzene, a feedstock used to make styrene monomer, moved up 14 cents to $3.13 per gallon in January but were flat February, leaving PS resin prices unaffected.
In feedstocks, regional prices for crude oil fell in February. West Texas Intermediate oil prices opened the month at $72.50 but slid almost 4 percent to $69.80 by the end of the month. Prices declined further from that point, but then recovered and were slightly above where they ended February as of early trading March 26.
Markets for natural gas — used as a feedstock to make PE and PVC — started February at $3.04 per million British thermal units, but jumped 26 percent to $3.83 by the end of the month, mainly as a result of colder temperatures. Prices increased more from that point but then began to decline. They were at $3.87 in early trading March 26, up 1 percent from where they ended February.
