US Polyethylene Prices Record All Time High Due to Strong Demand and Supply Constraints
US Polyethylene Prices Record All Time High Due to Strong Demand and Supply Constraints

US Polyethylene Prices Record All Time High Due to Strong Demand and Supply Constraints

  • 11-Jun-2021 12:00 PM
  • Journalist: Robert Hume

Polyethylene (PE) prices in the US are near record highs due to sudden increase in the demand of the resins across different end user industries. US has already been witnessing strong price increases since March after product availability got affected due to production-related disruptions and disturbed supply chains due to seasonal hurricanes and windstorms that adversely impacted the country’s PE production. low density polyethylene (LDPE), high density polyethylene (HDPE), some grades of HDPE and linear low density polyethylene (LLDPE) grades remained persistently tight throughout May.

Moving into June, market participants are seeing continued improvement in operations but a sharp pick-up in demand has further contributed to the widening of demand-supply gap. While market participants are still awaiting some operating units to fully perform and clear the existing backlogs until July or August, suppliers have continued to offer the material at increased rates. Key players such as ExxonMobil, Equistar, Dow and Chevron Phillips had already announced price increases in the range of USD 100-110 per MT for almost all grades of LDPE with effect from 1st June 2021. LDPE and LLDPE prices have gained nearly by more than 30% within 2021 as of now. FOB Texas LDPE film grade price settled between $1,995-$2,005/mt, by the end of May.

The reopening of economy following the pandemic also contributed well to rising demand from various sectors owing to its wide applications in different end user industries. LDPE demand is increasing at a faster pace from industries such as electrical & electronics, automotive, consumer goods and food & beverage. Despite of its increasing prices, the polymer’s demand is rising in the automotive industry as it is light in weight and helps to enhance the efficiency of vehicles by reducing their weight.

As per ChemAnalyst, the supply of PE is expected to remain on the shorter side and the prices would remain at present levels due to elevated demand and continued impact on the supplies. US export volumes have dipped significantly in Jan-April timeframe. Hence, a substantial dip in offers is needed for the participants to ramp up export volumes while global demand from the packaging industry stays strong. However, the situation seems difficult to predict looking at the ongoing market uncertainties. 

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