US Sept PE contracts settle higher on tight supply

29 September 2017 19:24 Source:ICIS News

Source: Gene Blevins/REX/ShutterstockHOUSTON (ICIS)--US September contracts for polyethylene (PE) were assessed higher on Friday owing to persistent supply limitations following Hurricane Harvey.

ICIS raised its assessments by 4 cents/lb ($88/tonne) as increase initiatives announced separately by sellers found broad acceptance in the market.

Sellers have also announced October increases of 3 cents/lb, which may also gain traction if post-Harvey supply tightness remains in place. Producers and traders stated that they are able to sell as much material as they have on hand as buyers are struggling to secure their requirements.

Export availability is heard to be quite limited. Chevron Phillips Chemical’s PE and alpha-olefins units in Baytown, Texas, remain shut and may not restart for several months, according to sources. The lack of alpha-olefins from the Baytown site has helped lead to a shortage of linear low density polyethylene (LLDPE) co-monomers hexene, butene and octene.

ICIS assessed September contracts for LLDPE butene (C4) film at 81-83 cents/lb, high density polyethylene (HDPE) blow moulding at 81-83 cents/lb and low density polyethylene (LDPE) liner grade at 90-92 cents/lb, all on a delivered US in bulk basis.

Image above: These balls are made of PE. Source: Gene Blevins/REX/Shutterstock
By Zachary Moore