NPRA ’09: US polyolefins producers face tough Q2

29 March 2009 19:26  [Source: ICIS news]

HOUSTON (ICIS news)--US polyolefins restocking helped drive a modest market recovery in the first quarter of 2009, but the sustainability of the recent price gains was in doubt as participants gathered in Texas on Sunday for the annual International Petrochemical Conference (IPC).

US polyethylene (PE) rose by 7 cents/lb ($154/tonne or €116/tonne) in February, but a 5 cent/lb March price hike initiative appeared to have stalled after feedstock ethylene spot prices softened.

High density PE (HDPE) blow moulding grade was at 46-50 cents/lb DEL (delivered), according to global chemical market intelligence service ICIS pricing.

PE buyers said they expected to see some erosion of the 7 cent/lb price increase in April, and a few sources said prices had already dropped slightly.

Buyers said increased feedstock supply would be the main driver of the expected PE price downturn.

Domestic PE demand slackened somewhat in March after restocking activity dwindled, but exports, especially to Asia, have provided a lift for producers.

A seller said he expected to see healthy export levels through May. A major concern was whether the Asian markets would remain as strong in June and beyond with significant new capacity scheduled online in the Middle East.

Polypropylene (PP) prices closely tracked the monomer contract during the first quarter, rising by a total of 9 cents/lb.

However, PP buyers were reluctant to purchase any more than immediate requirements at the end of March as monomer prices were expected to drop in April.

US homopolymer contract prices were at 43-46 cents/lb DEL (delivered) during the week ended 25 March, according to ICIS pricing. Block copolymer was 2 cents/lb higher than homopolymer, market sources said.

Major US PE producers include Dow Chemical, ExxonMobil, Chevron Phillips Chemical, Total and LyondellBasell.

The International Petrochemical Conference in San Antonio, organised by the National Petrochemicals & Refiners Association (NPRA), runs until Tuesday.

($1 = €0.75)

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For more on polyethylene visit ICIS chemicals intelligence


By: David Barry
+1 713 525 2653



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