LOS ANGELES , March 18, 2022 (Industry Intelligence Inc.) –
US Resins
Spot PE and PP prices hit new highs during the week of March 7 as processors look to meet immediate need and buffer their inventories.
Domestic PE producers in the US have managed to keep operating rates high, in part owing to the cost advantage of sourcing ethane feedstock, which is derived from natural gas rather than crude oil.
Still, producers are pushing for another US$0.06/lb contract increase for April as the market remains under tight supply conditions. Spot prices in the week of March 7 increased by about $0.01/lb.
PP prices moved up by a couple of cents early in the week before losing about $0.01/lb on Friday. Domestically, producers’ inventories are below their peak, resulting in a tighter leash on supply to the market.
The primary source of this information is Plastics Today.
Recycled Resins
North American recycled resins may see near-term market opportunities as skyrocketing virgin resin prices make the recycled counterparts more competitive, analysts say.
The region had already experienced elevated polymer pricing throughout 2021 as a result of production-disrupting weather events and logistics issues. Now that the market has finally achieved some balance, the war in Ukraine has added a new variable that will likely drive up prices.
Still, recycled resins are experiencing some supply tightness as large brands increasingly make recycled-based packaging commitments.
Recycled HDPE prices have increased faster than virgin HDPE prices, making it a ‘premium product’ in the marketplace, analysts say.
Meanwhile, recycled PET demand is unlikely to impact virgin PET prices in 2022.
The primary source of this information is Waste Dive.
Ethylene Cracking
Ethylene cracker operators in Asia and Europe–both regions dependent on naphtha as feedstock–have been reducing run rates as prices skyrocket, says Dow Chemical CFO Howard Ungerleider.
Naphtha, derived from crude, has risen in response to volatile crude prices.
European ethylene was assessed at US$1,623.61/tonne FD Northwest Europe on March 17, up 32% over Feb. 24 levels.
CFR Northeast Asia and CFR Southeast Asia ethylene were assessed at $1,300/tonne on March 17, an increase of 3% and 5.7%, respectively, over Feb. 24.
In the past two weeks, crackers in Asia with a combined capacity of about 10 million tonnes have announced production cuts by 10% to 20%, Ungerleider notes.
Meanwhile, Russia represents ‘few percent’ of global ethylene production, but could run into barriers to exporting due to sanctions imposed on the country.
The primary source of this information is S&P Global Platts.
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