PE Prices Drop Further

Polyethylene contract prices have dropped by 4ȼ/lb this month, for a cumulative price decrease of 7ȼ/lb since November, the first decreases in two years. Mike Burns, v.p. for PE at Resin Technology, Inc. (RTi), says this latest move has been confirmed by several PE suppliers.

 

Burns, for one, says it’s very reasonable that an additional drop of 7ȼ/lb can be expected within the first quarter 2015, as suppliers aim to meet global price benchmarks. This is providing that crude oil prices remain below $65/bbl and feedstocks are at current levels. He adds that spot prices dropped further this week, with multiple car offers of all PE resin grades ranging from 63-70ȼ/lb, down from an 80ȼ/lb range in August. He says, cumulative PE supplier inventory is now at the highest levels in at least five years.

 

Nick Vafiadis, senior director, global polyolefins and plastics at IHS Chemical, also believes that domestic PE prices will have to come down more to meet China’s prices in order not to lose exports and risk finished goods imports. He does note that significant planned and unplanned ethylene production outages this year kept prices up for both monomer and PE. He projects 2015 to be “less of a hard year” and maintains that the question is: will ethylene supply build up now taking place be enough to cover the upcoming scheduled spring maintenance shutdowns, starting in March and ending in May.

 

Looking ahead, Vafiadis says IHS believes that North American PE prices beyond 2016 will more competitive with global PE prices. IHS also projects that North American plastics processors will increase finished goods they export across the globe, and Vafiadis notes that many processors are already fortified with new and improved processing equipment in anticipation of this…becoming more and more globally competitive as China has been.

 

Want to find or compare materials data for different resins, grades, or suppliers? Check out Plastic Technology’s Plaspec Global materials database.