Market and product

US

US low-density polyethylene export prices were talked stable-to-higher on the week, with some market participants saying resin remained difficult to source.

Others suggested product was available, but the tighter market had prompted their suppliers to bump up the offer level.

US LDPE export prices were assessed September 23 at $1,146-$1,168/mt (52-53 cents/lb) FAS Houston, up $11/mt week on week. Rail car pricing was talked around 49 cents/lb, with bagged resin heard offered September 23 at 54 cents/lb.

Export activity was talked a bit slower on the week, sources said. Domestically, a 4 cents/lb decrease was likely to be fully implemented by the end of the month, but September contracts had not been settled, sources said.

August domestic LDPE contracts were assessed at 79-80 cents/lb ($1,742-$1,763/mt) for delivered rail cars after falling 5 cents/lb.

Dow Chemical has announced plans to increase October contracts by 7 cents/lb, while other producers have indicated to customers an unimplemented 5 cents/lb increase from earlier in the year remains on the table for next month, sources said.

Upstream, US spot ethylene prices dropped 3.375 on the week and were assessed Wednesday at 19.25-19.75 cents/lb FD USG for prompt-month deliveries.

The front-month assessment is at its lowest level since the July 13, 2009, price of 19.125 cents/lb, according to Platts data.

Sources talked of oversupply pushing prices lower, despite the ongoing production outage at four Texas plants.

ASIA/MIDDLE EAST

Asian low density polyethylene rose this week, reflecting the strength in HDPE and LLDPE markets. Although domestic trading activity in China remained subdued ahead of the upcoming long holiday in October, demand was heard to be rising in India.

"Demand is quite good because of the upcoming Diwali festive season and the draw down of inventories," a buyer in India said.

"The market seems to be reasonably stable now," said a Southeast Asian trader, shrugging off the bearish macroeconomic data released this week.

The preliminary Caixin China manufacturing PMI dropped to a 6 1/2-year low of 47 in September, signaling a significant contraction.

The Asian Development Bank on September 22 trimmed its growth forecast for some of the region's biggest economies including India and China.

LATIN AMERICA

Import assessments for low-density polyethylene in Peru were stable from a week ago at $1,210-$1,220/mt CFR basis September 23, as market participants said offers for US-origin product were becoming scarce in the region.

"We are seeing few offers of PE as sellers guard themselves from a possible price hike," a Peru-based buyer said.

While market sentiment was that pricing fundamentals had not changed for the period, there was talk that offers would be increasing in Q4. Despite unchanged pricing levels, participants in Peru said demand remained weak as economic conditions kept the markets bearish.

The few offers, coupled with disinterest from end-users, signaled to participants that an increase in pricing -- specifically from the US -- was imminent. In Houston, the FAS price rose $11/mt on the week to an assessment of $1,146-$1,168/mt.

In Brazil, the LDPE assessment rose $25/mt on the week to $1,245-$1,255/mt CFR Brazil, as Middle East- and US-origin material was talked higher.

Despite the thin buying activity domestically, sources said material was heard tight in US, with less availability to export.

In Asia, although domestic trading activity in China remained subdued ahead of the upcoming long holiday in October, demand was heard to be rising in India.

Brazil continued to deal with a weak currency. Exchange rate on September 23 was 4.1319 reals/ dollar, the highest on record, pushing import market participants to the sidelines.

"Our weak currency is holding the import market back," a Brazil-based distributor said. "No one wants to take risks."

As a result, offers were becoming harder to spot. "The market is paralyzed," a Brazil-based trader said.

For exports from Brazil to Mercosur countries, assessments were stable week on week at $1,295-$1,305 FOT basis, as Braskem offers into the Mercosur region remained unchanged, multiple sources said.

Participants in Paraguay and Uruguay said Brazil-origin offers for September were at $1,420/mt, down from August levels at $1,550/mt CPT basis.

EUROPE

European LDPE spot prices fell this week on continued flat demand due to bearish price expectation, sources said this week. LDPE prices closed September 23 at Eur1,280/mt FD NWE, down Eur10 on the day, and week.

"There is no big buying, and people only buy what they desperately need," one trader said.

In the contract market, prices fell Eur10, closing Wednesday at Eur1,500/mt. Contract prices have fallen by Eur140 so far this month, overtaking the fall in the ethylene contract prices of Eur90/mt.

One converter said that their demand was strong but that there were bearish expectations for October.

In production news, Serbian petrochemical producer HIP Petrohemija has restarted its cracker and high density polyethylene unit at Pancevo in northern Serbia following a seven-week turnaround, the company said Tuesday. The restart followed a planned turnaround that began August 1.

"By starting up the ethylene plant on Friday, September 18, the production in HIP-Petrohemija was successfully restarted. During the past weekend HDPE plant was successfully started as well, while the production in the
LDPE plant is expected to begin on Friday, September 25," it added.

The site houses a 200,000 mt/year steam cracker, a 57,000 mt/year LDPE plant, a 90,000 mt/year HDPE plant and a 40,000 mt/year SBR plant.