Falling margins help US buyers - consultant

17 September 2008 20:01  [Source: ICIS news]

BOSTON (ICIS news)--Falling commodity plastic margins in the US, combined with the global plastics markets heading for oversupply, are good news for US buyers, an industry consultant said on Wednesday.

However, the US is somewhat protected from commodity plastics trade, which is bad news for US buyers, said Andrew Swanson, vice president, chemicals, of Nexant.

Swanson told an audience at the Chemical Purchasing Summit in Boston that considerable new ethylene and polyethylene capacity is under construction in the Middle East and Asia. In addition, there are a number of expansions in polypropylene.

“As a result, operating rates are forecast to fall as new capacity rises faster than demand, leading to falling margins,” noted Swanson.

The implications for the US polymer purchasing sector are that the prices will come under pressure globally due to supplies from feedstock favoured regions. However, the US has a formidable non-tariff barrier to these resins in that the market is based on a bulk delivery system using hopper cars.

The Chemical Purchasing Summit is organised by ICIS and Purchasing magazine.

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By: Peter Taffe
+44 20 8652 3214

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