PE Prices Up

Polyethylene prices moved up 5¢/lb in December, bringing the total price inflation for 2020 to an unprecedented 24¢/lb. Suppliers issued hikes of 3-5¢/lb for January. According to Mike Burns, RTi’s v.p. of PE markets, PCW senior editor David Barry, and The Plastic Exchange’s Greenberg, at least part of those increases had a chance of being implemented. Burns noted that supplier inventories had been depleted by the end of the year, with the result that “contract buyers are getting everything they need, but non-contract buyers are having difficulty getting material and are paying higher prices.” Barry noted that demand was unlikely to be sustained at the same level, since processors had stocked up through December. “Still, PE pricing could potentially stay at these high levels for most of the first quarter.”

Greenberg characterized PE spot trading as remarkable, not from a volume perspective, but rather by the strong prices bred by scarcity of material. “Very tight fundamental dynamics have resulted from tremendous demand, both export and domestic; ongoing and new production issues; and a change in market sentiment as many buyers planned for a break in prices and readily available supplies, which never came. Although new PE production units have been coming onstream, and upstream inventories have built, some of this material is deemed as startup and much of the bulge is destined to be sold into the growing export market.”