Feiplastic ’19: PE oversupply in the Americas could remain in place for up to 4 years

SAO PAULO (ICIS)–Oversupply of polyethylene (PE) in the Americas region may remain in place for up to four additional years, participants said on the sidelines of this year’s Feiplastic.

“The large new capacity additions in the US are keeping North and South American PE markets oversupplied and we expect this situation to remain in place for the next four years,” a participant said.

“In addition to all the new PE plants built in the US in the last few years, at least two new plants are expected to start up between July and September of this year.  Most US producers have set up new offices in Brazil to sell directly while others are establishing sales channels through local distributors,” a Brazilian player said.

The significant additional volumes of US PE have resulted in a situation in which Latin American PE prices have fallen below global market averages, which may support higher prices in the region in the coming months.

“There are a lot of bans and restrictions being placed on plastic bags and other applications of high density polyethylene (HDPE) film, so we are seeing many producers shifting their production lines to favour other HDPE grades such as pipe, injection and blow moulding,” a market participant said.

PE is the most widely used plastic in the world, primarily found in packaging including plastic bags, plastic films and geomembranes.

Feira Internacional do Plastico (Feiplastic) takes place on 22-26 April in Sao Paulo, Brazil.