LLDPE Resin Pricing
Resin Update for October 2019
Contract PE resin prices settled up $.03/lb. in the month of September. This increase was followed with a flurry of very aggressive $.08/lb. price increase announcements from all the major resin manufacturers for October.
Last month we wrote that it would be very hard for any increases to get passed based on current market conditions, unless there were any unforeseen supply disruptions, well we had one…..
The September 14th attack of a Saudi oil production facility. The Abquaiq facility is the world’s largest oil processing facility. It accounts for nearly 50% of all Saudi oil production and about 5% global daily output. Oil prices reacted with a jump of almost 15% immediately following the attack.
Soon after the attack Aramco began to assure global markets that repairs would be completed quickly and that long term supply concerns were unfounded, that they would be restored to pre-attack volumes quickly. Crude oil prices dropped back to pre-attack levels.
Based on the news, resin manufacturers issued a revised increase announcement for October indicating that they would seek $.04/lb. rather than the original amount of $.08/lb.
Market indicators point to it being very difficult for the October increase to hold, although demand was stronger in September than it was in August there is a large price disparity between our resin prices at home and the Chinese market, this and the billions of lbs. of new polyethylene production coming on line during 4th quarters of 2019 and the first quarter of 2020.
Please contact your Poly PAK representative to see how these market conditions may affect your specific requirements.
Thank you for your business