[Plastic] Despite the recovery of U.S. export traffic, PE price peaks may continue into summer

The price of PE hit a record high on March 9th because the United States has recently delayed production due to the weather and the supply is tight.

Data show that on March 9, the spot price of Europe's main benchmark LDPE climbed to a record high of 1,800 euros/ton FD NWE (2139 US dollars).

A PE manufacturer said on March 5 that after the start of the US plant, it will give priority to US buyers first, followed by Latin American buyers.

"It's too early to judge," the producer said.

An ethylene producer said that stable prices in the United States and Asia have supported European derivatives, and European derivatives are currently able to pass on the rise.

The ethylene producer said on March 9: "We are at the top of cyclical growth.

The supply side has become so tight that the rapidly rising prices seen in March so far may mean that buyers may not be able to cope with the financial pressures of operating at these cost levels.

Resin manufacturers have encountered difficulties in managing production because the supply of monomers such as ethylene used as raw materials for PE is relatively limited, and there is a high demand for resin grades such as PE used for flexible packaging of food, personal care and pharmaceuticals.

Upstream in the supply chain, more complications are expected, including a European installation overhaul season that will begin in the second quarter.

The latest data from Platts shows that the price of LDPE FD NWE will gradually fall after hitting a high of US$2097/ton in March, and is expected to fall to US$1,333/ton in June.

Supply tightening

Since the second half of 2020, price pressures have been increasing because PE producers have reduced production before the end of the year’s financial accounting and tightened the supply chain.

As a result, ethylene supply was tight in December and early January, pushing spot prices up by double digits.

"We don't have any inventory, and our competitors are the same," the producer said.

(Keyword: PE price)