Stretchwrap Markets Review - November PE Contracts Remain Under Discussion While Ethylene and Ethan Rise
October 16 to November 15, 2009, Vol. 1, Issue 12
Spot polyethylene prices were steady-to-higher from the middle of October to the middle of November. Upstream, ethylene spot prices moved higher but did not keep pace with a sharp rise in ethane prices.
In the polyethylene contract market, producers continued efforts to implement increases of 4-5 cpp in November, which was an increase originally sought in October. This is in addition to a 4-cpp increase producers sought to implement in September. The proposed November increases are still under discussion.
Spot polyethylene prices continued to inch higher in November. HDPE blow mold has been discussed in the mid 50s cpp range, while LLDPE film butene grade remains at a premium of about 1.5 cpp. Prices are up from the low 50s cpp range in late October and early November. There continues to be some export demand for US-produced polyethylene, however, exports have not moved at the same pace as what was seen earlier this year.
Ethylene prices jumped from about 27 cpp in mid-October to about 33 cpp in mid-November. During this time period, ethylene spot prices peaked at 33.375 cpp on November 9, before easing to 32.75 cpp a few days later. Market participants said there were fairly healthy steam cracker operating rates, and there were no major plant outages. Notably, Shell has resumed operations at its OP-2 cracker in Deer Park, Texas, after taking it down at the beginning of October for planned maintenance.
Further upstream, ethane prices rose from around 53 cpp in the middle of October to 70 cpp in the middle of November. Ethane continues to remain a preferred steam cracker feedstock, which yields more ethylene and less propylene.
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