The Week in Chemistry: US PE, PP spot prices continue trending downward during week of Aug. 15, Asia naphtha trends downward amid weak downstream polymer prices; Dow to cut global PE production rates by 15%

Sample article from our Chemicals Industry

LOS ANGELES , August 26, 2022 () –

 

US Resins

Pressure remains for US resins producers to clear inventories as the cost of storage rises and new production capacity prepares to come online. As a result, spot pricing continued to decrease in the week of August 15.

Meanwhile, contract increases remain on the table for PE as producers anticipate hurricane season. 

Based on spot prices, August contracts could increase by about US$0.02/lb.

PP inventories, similarly, have reached high levels in the midst of below-average trading. 

Spot PP prices have fallen by about $0.05/lb so far in August after sinking $0.07/lb for the month of July. 

Since late April, spot PP prices have fallen by about $0.21/lb.

The primary source of this information is Plastics Today.
 


Global PE Production

Dow has announced in a letter to customers that it will cut reduce its global PE production rates by 15%.

The company cited logistics challenges in the US and Europe since late 2021.

The decision comes as markets largely awaited US polymer producers to reduce production rates, responding to softening global demand.

Adding to pressures, Asian polymer exports have recently increased amid weak domestic demand, a result of coronavirus-related restrictions earlier in 2022.

US PE prices for export and domestic sale sank by 33.3% to US$1,036/tonne FAS Houston since late May.

European prices slid 23.4% to $1,373/tonne FOB NWE during the same period.

The primary source of this information is S&P Global Platts.

 


Asian Naphtha

China’s lackluster economic and industrial outlook has impacted the naphtha market, which will likely continue to see weak demand.

In addition, plummeting polymer prices have led to a bearish outlook for naphtha upstream. After hitting a high of US$1,158.63/tonne on March 7, naphtha prices have been trending downward.

Still, falling prices have done little to encourage trading, ‘purely because demand is not there,’ sources say.

The primary source of this information is S&P Global Platts.

 

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