U.S. polyethylene prices could come down after the first quarter 2016 as new North American capacity comes on line. Yet, short polypropylene supplies could impact prices of that resin in the Americas.

That’s the view from Nick Vafiadis speaking at FPA’s Fall Executive Conference. He is Global Business Director, Polyolefins and Plastics at IHS Chemical. Factors driving global PE prices include:

  • New North American PE capacity that portends a more competitive environment.
  • For 2016, U.S. prices will remain high compared to the rest of the world. Yet, HDPE prices may ease later in the year to about 55 cents per pound.
  • U.S. PE producer operating rates remain high, and a tight market continues, based on market growth and access to export markets.

Among the factors affecting global PP prices are:

  • Massive Chinese and Middle East capacity expansion that puts downward pressure on regional prices in the short term.
  • Europe should see competitive pressure from PP expansions in China and the Middle East.
  • South America—with little expansion in process—becomes more dependent on PP imports.
  • North American producer profitability should increase because of tight supply and demand.
  • Cost of both pellets and finished goods increase in the Americas.

 

For More Info

For a copy Nick Vafiadis’ presentation, FPA members can go to www.flexpack.org and click on: “Download Presentations from the FPA Fall Executive Conference.”