Quick Packaging News

Domestic Linear Low Density Polyethylene (LLDPE) hexene contact pricing remained unchanged for the month of February. Flat pricing was a highly contested result for the month as producers were pushing for a $0.03 to $0.05 increase, pointing to modestly improved demand and constrained production in the first two months of the year. However, ample inventory across the supply chain remained the dominant factor giving buyers the ability to push back on proposed price increases for the month. Understand, producers are not giving up on their plans for an increase. Instead of canceling proposed February increases, they have moved their increases to March, and those increases are now between $0.05 and $0.06. On paper, producers’ insist the increase is needed because of higher demand domestically, and specifically high demand in exports to Asia and Latin America. Behind the scenes we know operating margins at these producers are at a ten year low. Like any business in the past two years, re...

POLYETHYLENE MOVED UP IN JANUARY – After three months of flat pricing, linear low density polyethylene (LLDPE), hexene, contract pricing moved up $0.03/lb. Final settlement came after weeks of negotiations between buyers and sellers at odds over the proposed price hikes.  Producers had been pressing for the higher prices arguing that supply has tightened enough to warrant an increase, while buyers insisted demand was not strong enough to justify a price move. In the end, producers won out and have even doubled-down, proposing an additional price hike of between $0.03/lb and $0.05/lb for February. Hard to say if this increase will pass, a lot of capacity in the stretch film market today.   Manufacturers have added lines and are ramping up production and need a home for all this new film.   Distributors have a lot of film on hand, will see how this increase plays out. More information at www.quickpakinc.com      

  Domestic production remains stable with some improvement in the supply of LLDPE hexene resin, but some PE grades remain tight, particularly HDPE blow molding and injection molding resin. Inventory levels were a topic of discussion this week as buyers looked for offers in the spot domestic and spot export markets. Indeed, several deals were discussed but little buying activity was reported as prices remain elevated versus imports from other regions such as Asia, but sellers are more open to discussions on trade opportunities versus previous months. Four domestic producers have announced a 5 cpp price increase for domestic contracts sales, effective 1 September for all PE types, in addition to their announced increases for August. More information at www.quickpakinc.com

Buyers reported that resin availability is improving but certain grades such as LLDPE C6 and HDPE.  Blow Molding remain tight. Production in the US continues to improve with reports that most units are up and running as ethylene supply improves due to crackers coming online. However, several plants are not back to full production with reports of two major producers running at about 80% of the pre-freeze levels due to mechanical/feedstock limitations. Several resin producers are indicating inventory levels should improve in May, resolving many of the force majeure events but allocations are likely to continue through June. Price increases for all PE grades of 5-6 cpp have been communicated to the domestic market effective May 1, 2021. Domestic HDPE spot prices (FOB Houston Railcar) were reported in the range of 83-87 cents per pound (cpp) on a notional basis. LLDPE butene resin prices were reported in the 80-84 cpp range (down 1 cpp) and LDPE was reported flat with prices in the ran...

North America:  Contract PE prices settled higher by 4.0 cents per pound in January as sellers achieved the increase they have been pursuing since September of last year. PE producers have announced their intent to increase contract prices by an additional 4.0 - 5.0 cents per pound in February. Domestic demand appears to be recovering as buyers restock inventories that were depleted at year end. Resolution of the settlement was complicated by the fact that the January negotiations were characterized by multiple diverging market indicators. Factors cited by sellers in support of a price increase included the following: 1.       Reduced inventory levels: IHS Market inventory analysis indicates that PE resin days of inventory have declined in each consecutive month since July 2018. As of December, the calculated resin days of inventory stood at 36.1 days and reflected the fewest days of available inventory since February 2017. The referenced...