US December PE contracts settle flat

02 January 2014 20:53  [Source: ICIS news]

HOUSTON (ICIS)--December contracts settled flat in the US polyethylene (PE) market, with stronger domestic demand and more export opportunities keeping prices from falling during the month, sources said on Thursday.

While there were some end-of-year deals for a slight discount heard in early December, buyers and suppliers agreed that those were not market-wide moves and that contract pricing for the month remained flat.

The rollover has resulted in a third month of flat pricing in the PE market, which saw prices for high density polyethylene (HDPE) rise by 16 cents/lb ($353/tonne, €258/tonne) in 2013, while prices for low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) rose by 14 cents/lb over the course of the year.

Buyers had been pushing for a decrease of up to 3 cents/lb over the past several months, hoping that weaker domestic demand and growing producer inventory levels would push prices lower. However, with the export window open, any excess material quickly found a home, sources said.

“Producers have very solid chain margins, so that export is an option, unless something really happens structurally or foundationally,” said one producer. “Export is always going to be a good option for North America because of our low cost position.”

Prices in January are also expected to settle flat, with no price increase announcements for the month.

At least two producers have announced a 4 cent/lb price increase for February PE contracts, but sources say it is too early to say whether those increases will be accepted.

Following the December settlement, prices for LLDPE butene film were at 79-81 cents/lb DEL (delivered), LDPE film prices were at 88-90 cents/lb DEL and HDPE blow moulding prices were at 79-81 cents/lb DEL, for small volume buyers, as assessed by ICIS.

Major North American PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, Total, NOVA Chemicals and Formosa Plastics.

($1 = €0.73)


By: Michelle Klump
+1 713 525 2653



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