Volume: Good
Price: Steady
Spot Polyethylene prices stalled this week, as participants assess the many fundamentals currently influencing the market. Resin producers point to sharply higher energy and feedstock costs along with strong resin sales to help support their desire to raise resin prices $.11/lb further in November. On the other hand, while Ethylene prices were indeed much higher during October, they are now under pressure and have begun to give back the gains as outages are resolving. Additionally, while offshore Polyethylene sales had been tremendous, they have recently waned. Still, Polyethylene producers will stand tall in the first part of November, looking to enforce as much of their price increases that the market will bear.
Ethylene monomer supplies were tight even before several outages, some caused by Hurricane Humberto, further restricted supplies. This caused spot Ethylene prices to rally sharply and October Ethylene contracts have begun settling $.05/lb higher. While producers have been able to pass $.04/lb on through to October resin contracts, the rapidly rising costs have eaten dramatically into export margins, where prices have moved only marginally higher.
Growing exports sales, sometimes eclipsing 20% of domestic business, have become a very large and important component of overall North American Polyethylene production. Rather than utilizing this channel to offset surplus supplies as done traditionally, producers have targeted this market with specific production enabling very high operating rates. When monomer costs soared earlier in October, producers attempted to raise export prices by at least $.04/lb, but the higher asking price disabled the large volume export sale and consequently upstream inventories have swelled.
Producers have again lowered export prices, some back to late September levels, hoping to spur aggressive sales. While offshore sales could quickly rebound, given the season, it does not seem reasonable to expect a record export month ahead.
Polyethylene producers have successfully secured their $.04/lb price increase for October resin contracts. When the Ethylene market was spiking, additional gains for November resin contracts seemed likely. Now with spot monomer prices easing and export sales softer, the next $.11/lb could become a challenge. Unless there is another major monomer outage, how much of a contract increase that Polyethylene producers can garner in November will be largely determined by demand.
There was good domestic resin buying in October even though throughput at the processor level continues to disappoint. While processors are still manufacturing for holiday sales, some economic pundits are calling for a lackluster shopping season. It appears that many processors, eyeing much higher contract prices in November, did pre-buying in October by maxing out their contract purchases. Consequently, some processors hoping to avoid the next price increase, have now positioned themselves to avoid buying any resin until the last week of November.
Price: Steady
Spot Polyethylene prices stalled this week, as participants assess the many fundamentals currently influencing the market. Resin producers point to sharply higher energy and feedstock costs along with strong resin sales to help support their desire to raise resin prices $.11/lb further in November. On the other hand, while Ethylene prices were indeed much higher during October, they are now under pressure and have begun to give back the gains as outages are resolving. Additionally, while offshore Polyethylene sales had been tremendous, they have recently waned. Still, Polyethylene producers will stand tall in the first part of November, looking to enforce as much of their price increases that the market will bear.
Ethylene monomer supplies were tight even before several outages, some caused by Hurricane Humberto, further restricted supplies. This caused spot Ethylene prices to rally sharply and October Ethylene contracts have begun settling $.05/lb higher. While producers have been able to pass $.04/lb on through to October resin contracts, the rapidly rising costs have eaten dramatically into export margins, where prices have moved only marginally higher.
Growing exports sales, sometimes eclipsing 20% of domestic business, have become a very large and important component of overall North American Polyethylene production. Rather than utilizing this channel to offset surplus supplies as done traditionally, producers have targeted this market with specific production enabling very high operating rates. When monomer costs soared earlier in October, producers attempted to raise export prices by at least $.04/lb, but the higher asking price disabled the large volume export sale and consequently upstream inventories have swelled.
Producers have again lowered export prices, some back to late September levels, hoping to spur aggressive sales. While offshore sales could quickly rebound, given the season, it does not seem reasonable to expect a record export month ahead.
Polyethylene producers have successfully secured their $.04/lb price increase for October resin contracts. When the Ethylene market was spiking, additional gains for November resin contracts seemed likely. Now with spot monomer prices easing and export sales softer, the next $.11/lb could become a challenge. Unless there is another major monomer outage, how much of a contract increase that Polyethylene producers can garner in November will be largely determined by demand.
There was good domestic resin buying in October even though throughput at the processor level continues to disappoint. While processors are still manufacturing for holiday sales, some economic pundits are calling for a lackluster shopping season. It appears that many processors, eyeing much higher contract prices in November, did pre-buying in October by maxing out their contract purchases. Consequently, some processors hoping to avoid the next price increase, have now positioned themselves to avoid buying any resin until the last week of November.
