Volume: Mostly high, some grades scarce
Price: Steady to lower
Spot Polyethylene prices on average were mostly steady this past week, which is contrary to producers' efforts to raise September contracts by as much as $.09/lb. Spot prices have been unable to regain steam since slipping a couple cents from season's highs after the August price increase was pushed off. Notwithstanding the upstream jolt caused by Hurricane Humberto, some, but not all Polyethylene producers have also postponed their September price increase initiatives.
Polyethylene prices have been supported by excellent export demand that has carried the market even while domestic demand has essentially been flat. Although offshore sales still remain a significant portion of Polyethylene production, export demand cooled during August and has not seemed to have recovered to the fervent level seen earlier in the summer. Up until European traders took a long holiday break during August, the arbitrage was wide open and export sales were only limited by logistics constraints.
During August, European Polyethylene demand stalled while producers' Houston asking prices continued to increase. Prices reached the level where US resin was no longer such a deal. At this time, Asian traders stepped in with competitive offers and the window began to shut. North American Polyethylene producers have responded by reducing export asking prices, but the large and easy sale has now become elusive.
The market's momentum towards higher prices has been disrupted, causing traders and distributors to seek inventory liquidations and processors to re-think their buy ahead strategies as they assess their own inventories resin usage. Further, the result of slowing export sales has been large volumes of certain grades becoming available in the spot market.
HDPE injection and blow molding grades are plentiful and their prices have softened, while HMW film grade resins have finally become less scarce. LDPE film grades are still hard to source and have yet to give back any of the premium gained in the spot market. Supplies of LLDPE film grades have tightened, with relatively few fresh railcars offered to the spot market.
Price: Steady to lower
Spot Polyethylene prices on average were mostly steady this past week, which is contrary to producers' efforts to raise September contracts by as much as $.09/lb. Spot prices have been unable to regain steam since slipping a couple cents from season's highs after the August price increase was pushed off. Notwithstanding the upstream jolt caused by Hurricane Humberto, some, but not all Polyethylene producers have also postponed their September price increase initiatives.
Polyethylene prices have been supported by excellent export demand that has carried the market even while domestic demand has essentially been flat. Although offshore sales still remain a significant portion of Polyethylene production, export demand cooled during August and has not seemed to have recovered to the fervent level seen earlier in the summer. Up until European traders took a long holiday break during August, the arbitrage was wide open and export sales were only limited by logistics constraints.
During August, European Polyethylene demand stalled while producers' Houston asking prices continued to increase. Prices reached the level where US resin was no longer such a deal. At this time, Asian traders stepped in with competitive offers and the window began to shut. North American Polyethylene producers have responded by reducing export asking prices, but the large and easy sale has now become elusive.
The market's momentum towards higher prices has been disrupted, causing traders and distributors to seek inventory liquidations and processors to re-think their buy ahead strategies as they assess their own inventories resin usage. Further, the result of slowing export sales has been large volumes of certain grades becoming available in the spot market.
HDPE injection and blow molding grades are plentiful and their prices have softened, while HMW film grade resins have finally become less scarce. LDPE film grades are still hard to source and have yet to give back any of the premium gained in the spot market. Supplies of LLDPE film grades have tightened, with relatively few fresh railcars offered to the spot market.
