ICIS price assessments for polyethylene (PE) are widely used by market players globally in contracts and trade deals. Our reports provide you spot and contract prices for key PE grades, as well as feedstock prices and trends drawn from our global network of trusted sources.
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Updated to Q4 2019
China’s Q4 2019 supply was ample due to the opened arbitrage window between China and southeast Asia markets amid competitively-priced cargoes in southeast Asia. Regional supply in southeast Asia gradually reduced towards the end of 2019, with limited year-end destocking, amid lower production rates on the back of weak margins. China’s recent removal of additional tariffs on US materials have have limited effect on trade flows.
China’s Q4 demand fared better compared with the southeast Asia market, with restocking activities towards the year end. End-users’ profits improved on lower prices of feedstock resin, which supported demand. Demand across southeast Asia remained tepid amid bearish market sentiment and weak consumer markets. Most converters and traders are keeping inventory low and purchasing on a as-needed basis amid a market downtrend due to availability of multiple supply sources.
European polyethylene (PE) was facing a new swathe of imports – mainly from the US – at the end of 2019. Trade flows have shifted, on new capacity and the China/US trade war, and new material has been arriving in Europe. Several other large scale plants are coming on stream, in Russia, Malaysia and China. PE prices in Europe have subsequently plummeted. Local prices have held up better but competition is fierce. The spread between ethylene and PE is low.
Q4 demand was mixed. Buyers with end-year volume rebates in place continued to buy, while others aimed to end the year with low stocks, for accounting purposes. Spot activity tailed off towards the end of Q4 and North American traders with fresh US product offered very low prices to interest buyers. Large buyers with links to brand owners generally eschewed these offers, but those who could take such volumes took advantage of the low prices.
US polyethylene (PE) supply remained long in the fourth quarter. Average operating rates were said to be high while overall US production was higher following the start up of several large scale new plants in the past several years. Three new plants—Sasol’s LDPE unit in Lake Charles, Louisiana, Formosa’s LDPE unit in Point Comfort, Texas and LyondellBasell’s HDPE unit in La Porte, Texas were aiming for a late fourth quarter start up.
Domestic demand slowed in the fourth quarter, following general seasonal patterns. November and December are two of the slowest months of the year in terms of demand. This is because of the Thanksgiving, Christmas and New Year holidays as well as year-end bookkeeping concerns, with many companies trying to minimise inventories ahead of the close of the calendar year. Overseas demand remained strong as US PE exports rose substantially from the previous year, although price competition in target markets was intense.
Weak global demand levels left suppliers with surplus stock. This meant that offers were ample, varied and competitive for the quarter. There was a slight shortness of low density polyethylene (LDPE), due to tightness in the Middle East. Changes to regulations on imports in Algeria scared away some suppliers, limiting availability towards the end of 2019. Limited access to foreign exchange in west Africa left some buyers unable to pay for deliveries.
African PE demand followed the global tendency for the fourth quarter, remaining low and flat. Economic uncertainty and falling prices left little incentive to buy more than the minimum requirements. Increases in US offers in the last few weeks of December may have promoted some increase in demand for high density polyethylene (HDPE) and linear low density polyethylene (LLDPE). West African demand was hampered by unusually wet weather. Heavy rains reduced end-user buying.
Further production expansions through the end of 2019, mostly in Asia, meant that supply remained long. Stocks were healthy for many and buyers felt little supply pressure. Available offers were varied and competitive in the final quarter, especially as the year-end approached and suppliers looked to clear their stocks. There was some shortness in low density polyethylene (LDPE), due to tightness at Middle East producers.
Demand was low and flat through the quarter, reflecting the general global trend. The fourth quarter usually sees a pickup in demand, following the quieter summer months but this faltered in 2019. As buying interest was poor all over the world, suppliers made competitive offers into Turkey. Europe especially pushed low density polyethylene (LDPE) and US focusing on high density polyethylene (HDPE) film and blow.
Sufficient regional supply prevailed and weighed on prices in the region. Bearish sentiment emerging from Asia against a backdrop of uncertainty surrounding the US-China trade war also resulted in surplus availability with sellers. Moreover, the attempt to maintain lean inventories at the end of the financial year also left sellers flushed with stocks.
Demand across the Middle East stayed largely sluggish, with overall packaging consumption weighed down by a generally sluggish economic landscape. The uncertainty emerging from the trade war between China and the US continued to weigh on buying, with purchases restricted to a need-to basis as buyers were not keen to build stocks. Attempts to maintain lean inventories at the financial year-end also weighed on demand in November and December.
Polyethylene (PE) supply returned to normal in Q4 with the restart of the Dow crackers in Argentina and the restart of the swing plant in Mexico that had a planned maintenance shutdown. Pemex still runs HDPE production using only the Mitsui plant. The Venezuelan PE plants continued to work at very low operating rates in Q4. PE production was normal in other countries of Latin America.
During Q4, PE demand remained weak in South America because a strong dollar brought currency depreciation and inflation in several Latin American countries. Social unrest in Chile, Bolivia, Peru and Colombia was also a big factor in declining demand. Q4 demand was softer than expected in Mexico, where PE oversupply was more evident.
ICIS publishes pricing reports for key polyethylene grades and offers timely and in-depth market data, including price assessments, trade activity, feedstock supply and analysis of each region’s current and upcoming export availability.
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Key trading prices and activities – Import, export, domestic prices. Offers, bids, transactions
Price alerts and market updates: Shifts in prices, latest news on the PE market developments and changes to regulations and demand trends
Plant data: Production and capacity, plant maintenance and shutdowns
Feedstock: Prices and market updates for feedstocks – crude, ethane and ethylene
Historical prices: Download and/or chart pricing from as far back as the start of ICIS coverage
Weekly market outlook: Overview and outlook for the overall PE market, including a brief commentary on the other regional markets
Supply and demand: Analysis of domestic and international supply and demand
Regional coverage: Africa, Asia-Pacific, China, CIS, Europe, Latin America, Middle East/South Asia, Turkey, US
Middle East/South Asia:
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