Force majeure on high-density PE
Another producer issued a force majeure last week, this time for high-density (HD) PE out of Louisiana. The fresh force majeure comes just a week after a major resin producer issued one on all of its polymer products because of railroad congestion. Demand for North American trucks has seen an uptick from the petrochemical and resin industry caused by railroad traffic allocations. The strain on rail congestion already pushed one major industry logistics provider to announce a railcar surcharge earlier in the month. This is on top of escalating packaging and warehouse fees writes the Chicago-based resin clearinghouse.
One influential pricing index estimated that April PE contracts would roll flat in the face of the current six to seven cent increase, which seemed to douse the flames of the market’s upward momentum, at least for the moment, notes the PlasticsExchange. Producers did not seem to like that call, as by mid-month the spot market had already been taking $0.02 to 0.04/lb of the April increase in stride, and producers had just nominated another six to seven cent increase for May.
Spot Prime PE prices rise one more cent
Low-density PE Film grades biggest movers of the week
PE producers continued their collective push for an April price increase of $0.06 to 0.07/lb, and the balance of major producers nominated another $0.06 to 0.07/lb increase for May for a two-month total of $0.12 to 0.14/lb. LDPE Film grades were the largest movers last week at the PlasticsExchange trading desk. HDPE sales were described as good, but reduced from recent weeks and well spread between Blow Mold and Injection grades. Linear-low-density PE film grades suffered from a lack of competitive supply.
Preliminary numbers showed March PE exports up roughly 30% from February, but logistical constraints remain as Houston warehouses are still packed with resin, empty railcars are scarce, key rail lines are congested, and trucks are in short order. All of that lends itself to additional upward pricing pressure for PE.
Posted by staff | Apr 27, 2022