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PE prices on the rise; buyers ‘very frustrated'

작성자 : 이명규 기자 2024-05-21 | 조회 : 77

 

PE prices on the rise; buyers ‘very frustrated'

 

 

 

 

 

 

After a contentious battle, North American polyethylene resin prices settled up 3 cents per pound in April.

 

The price hike was hotly debated by producers and buyers, with producers finally being able to make the increase stick. Regional PE prices had been flat for the previous two months and five of the previous six, with the exception of a 5-cent hike that took hold in January.

 

Buyer resistance to the April hike could mean that the increase will be a short-lived one, with prices dropping a similar amount in May or June, market sources told Plastics News. Some suppliers also have a 3-cent increase on the table for May.

 

"I'm still in discussions with some of my [resin] suppliers, but I think ultimately the 3 is likely to stick," a PE buyer in the Southeast U.S. said. "Most suppliers have said the [April] increase could have — or should have — happened in February or March. The fact that the market began to soften in April is where the dispute [on the increase] is coming into play a bit."

 

Market analyst Mike Burns said regional PE buyers "are very frustrated" with the April increase.

 

"There's nothing out there to justify it," added Burns, who is with Plastic Resin Market Advisors. "There's no driver based on cost and the market is oversupplied. And some buyers still think the January increase was a gift to suppliers."

 

The only potential reasoning behind the April hike was that U.S./Canadian PE sales for the month were the highest in two years, according to the American Chemistry Council. But PE inventories in the region remained relatively high in spite of the sales boost.

 

"Domestic demand remains fairly good and exports are very strong," a PE buyer in the Midwest U.S. said. "Domestic inventories aren't short, but they're at a relatively low level, mainly due to exports.

 

"No one said [PE makers] deserved it, but when they all dig in, they can make it happen."

 

Exports of PE resin from the U.S. and Canada reached an all-time high of 45 percent of total production in 2023. The export rate is slightly higher than that record level so far in 2024. A considerable amount of PE capacity added in the last 10 years because of low-priced shale gas and oil has been intended for export markets.

 

By comparison, exports accounted for 23-28 percent of North American PE production in 2015-18 and 33-39 percent of that amount in 2019-22.

 

 

* Source : https://www.plasticsnews.com/resin-pricing/pe-prices-rise-buyers-very-frustrated