North American polyethylene prices could come down – thanks to the looming potential for a record global overcapacity. Polypropylene prices may also edge lower as imports impact the North American market.

Nick Vafiadis, Global Business Director, Polyolefins and Plastics at IHS Chemical, offered that view at FPA’s 2016 Fall Executive Conference. The analysis covered the polyolefin value chain from well head to resin production facilities.

While polyethylene prices may bump up to 60 cents per pound during 2017, they could be near 53 cents per pound by year’s end, Vafiadis suggests in the IHS forecast. Beyond overcapacity, other factors affecting PE prices include:

  • The impact of cost-competitive regions trying to gain global market share.
  • Changes in regional pricing strategies.
  • Some 5 million metric tons of North American capacity coming on-line in 2016-2017.
  • The price impact of any delays in bringing new startups on-line will be dampened by overall overcapacity.

Polypropylene could be around 63 cents per pound in North America by the end of 2017, the IHS forecasts suggests. Mid-October 2016 prices were around 70 cents per pound. Factors affecting global PP prices include:

  • Expanding North American PP imports in 2017, even as 2016 becomes the year of the import.
  • Local supply and demand disruptions will drive volatility.
  • News of debottlenecking in 2016-2017 will have an impact on capacity.

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