Volume: Lower
Price: Higher
The Polyethylene market was fairly active again this week, although there were fewer fresh domestic spot offers shown other than at the fully $.04/lb increased price. Trading volumes were lower since exports were tough and domestic processors en masse have been reluctant to place orders in October at the increased price. Producers, pressured by still rising energy and feedstock costs, have taken new measures to ensure that their $.04/lb price increases finally takes hold in October
Late in the week, at least one Polyethylene producer removed its Temporary Voluntary Allowance (TVA) on the $.05/lb price increase originally slated for September 15th. This would effectively raise their October Polyethylene prices by a total of $.09/lb as of Oct 15th. While that entire increase might not take effect on Monday, other producers have reiterated their intentions to enforce their $.05/lb price increases on Nov 1st.
These initiatives will give buyers, who have successfully resisted the implementation twice, something more to think about. This time it seems that the $.04/lb increase will go though and if Ethylene monomer prices continue to rally, producers will have a strong argument as they work on the next nickel in November.
Ethylene prices took another leg higher after Hurricane Humberto forced the shut down of several Ethylene producing assets in the Gulf. This, coupled with planned maintenance outages, has made a tightly supplied Ethylene market even shorter. However, it seems that the worst might about to be behind us.
Some cracker capacity was expected to return back on stream over this weekend and others are scheduled to return back to on-spec production over the next couple of weeks. Still, some monomer inventories need to rebuild, so the market will not be awash in monomer for some time. However, the high price of Ethylene has now made for a compelling spot sale of monomer by producers with discretionary pounds of the feedstock on hand.
Since spot Ethylene prices have rallied more than $.07/lb during the past month, Polyethylene producers have recently raised their asking prices for export sales. Even with the US dollar remaining around all time low values against the Euro currency, there is a seasonal drop off in exports, since cargoes ordered today might not deliver until December. Consequently, some of the high volume export arbitrage sales have been disabled based on price and logistics constraints.
This will be a very important week ahead for the Polyethylene market. We expect to see more domestic buyers come to the markets, both contract and spot, to procure much of their monthly resin needs. We believe that the producers will remain firm in their offerings and the $.04/lb price increase to become effective for October contracts.
Price: Higher
The Polyethylene market was fairly active again this week, although there were fewer fresh domestic spot offers shown other than at the fully $.04/lb increased price. Trading volumes were lower since exports were tough and domestic processors en masse have been reluctant to place orders in October at the increased price. Producers, pressured by still rising energy and feedstock costs, have taken new measures to ensure that their $.04/lb price increases finally takes hold in October
Late in the week, at least one Polyethylene producer removed its Temporary Voluntary Allowance (TVA) on the $.05/lb price increase originally slated for September 15th. This would effectively raise their October Polyethylene prices by a total of $.09/lb as of Oct 15th. While that entire increase might not take effect on Monday, other producers have reiterated their intentions to enforce their $.05/lb price increases on Nov 1st.
These initiatives will give buyers, who have successfully resisted the implementation twice, something more to think about. This time it seems that the $.04/lb increase will go though and if Ethylene monomer prices continue to rally, producers will have a strong argument as they work on the next nickel in November.
Ethylene prices took another leg higher after Hurricane Humberto forced the shut down of several Ethylene producing assets in the Gulf. This, coupled with planned maintenance outages, has made a tightly supplied Ethylene market even shorter. However, it seems that the worst might about to be behind us.
Some cracker capacity was expected to return back on stream over this weekend and others are scheduled to return back to on-spec production over the next couple of weeks. Still, some monomer inventories need to rebuild, so the market will not be awash in monomer for some time. However, the high price of Ethylene has now made for a compelling spot sale of monomer by producers with discretionary pounds of the feedstock on hand.
Since spot Ethylene prices have rallied more than $.07/lb during the past month, Polyethylene producers have recently raised their asking prices for export sales. Even with the US dollar remaining around all time low values against the Euro currency, there is a seasonal drop off in exports, since cargoes ordered today might not deliver until December. Consequently, some of the high volume export arbitrage sales have been disabled based on price and logistics constraints.
This will be a very important week ahead for the Polyethylene market. We expect to see more domestic buyers come to the markets, both contract and spot, to procure much of their monthly resin needs. We believe that the producers will remain firm in their offerings and the $.04/lb price increase to become effective for October contracts.
