Daily Chemical Reactions

Polyethylene Price Paradox: Unraveling Contract and Market Dynamics That Do Not Suggest Higher Prices
August 23, 2023
Commodities Mentioned:
Plastics (PVC, PP, PE, PU, PC, PET, etc.), Clean Energy Minerals, Carbon Dioxide, Hydrogen, Natural Gas/NGLs, Crude/Naphtha
Companies Mentioned:
LyondellBasell, Dow, Nova Chemicals, ExxonMobil, Baystar, Chevron Phillips Chemical, Olin, Odyssey Manufacturing, Kureha, AMG Critical Minerals, Allkem, Hengli, Sinochem, Delta Airlines, Kore Potash, Unigel, Woodside, Kinder Morgan, Sigma Lithium, Clearloop, E3 Lithium, Covestro, BASF, Kronos, PTT Global Chemical, Tesla, Cleveland-Cliffs, US Steel, Aramco, McDermott, PureCycle Technologies, Plug Power, Oceanlab, Brennmiller, CarbonCapture Inc., M. Holland, Ravago, Zhejiang Petrochemical, Williams-Sonoma

Daily Chemical Reaction

Polyethylene Price Paradox: Unraveling Contract and Market Dynamics That Do Not Suggest Higher Prices

Key Points:

  • US polyethylene (PE) producers are pushing for contract price hikes in August, which we think will further delay a much-needed non-market adjustment based on global spot PE price trends.
  • The potential to implement higher prices due to hurricane season outages is a chief reason for the nominations – higher oil prices or major outages are needed to lift PE prices amid oversupply.
  • USGC ethane and North American LNG export capacity expansions are underway to provide overseas markets with cheaper energy and chemical feedstock, favoring tighter global spreads.
  • We discuss scrap plastic values, which are broadly depressed, the multiple levers being put in motion to decarbonize LNG exports, and the YTD EU carbon value support relative to the UK.
  • We discuss the German PMI and the competitiveness of its manufacturing industry, compare global PMI trends that signal weak conditions globally, and highlight recent Baltic Index trends.

See PDF below for all charts, tables and diagrams

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