HDPE prices flat through at least year's end
By Staff -- Purchasing, 2/11/1999
Sales of polyethylene, particularly high-density polyethylene (hdpe), have been strong in the last year, and most industry analysts, including the editors at Purchasing, believe this strong performance will continue in 1999. Contracts currently average 36¢/lb for blow-molding-grade hdpe.Buyers currently are paying an average 36¢/lb for contracts of hdpe used in blow-molding applications; spot prices are about 33¢/lb. Barring any unforeseen supply disruptions or economic crises, buyers can expect prices to remain flat or increase only slightly through the end of the year.
According to Purchasing's monthly chemical transaction price survey, prices for blow-molding hdpe contracts averaged 38¢/lb at this time last year. Spot tags in first-quarter '98 were about a half cent less at 37.5¢/lb. Buyers anticipate that contract and spot market prices will continue within a price range of 35¢-37¢/lb for contracts, and 33¢-35¢/lb for spot tags through the end of the year.
The forecast for film-grade hdpe is not as robust. Respondents to Purchasing's chemical price survey said contract prices were at 46.8¢/lb on average for the first quarter of last year and 47¢/lb at that time for spot tags. Prices remained fairly flat for both spot tags and contracts through the end of 1998, but the six-month forecast is for decreases on the order of 6¢/lb. Buyers say average contract prices for film-grade hdpe will be 42¢/lb by the end of first-quarter 1999, falling to about 40¢/lb by the end of the year. Spot tags will follow the same price trend as contracts for film-grade hdpe.
Industry analysts at pace Petrochemical Services, Inc., in Houston, Texas, say that hdpe supplies tightened at the end of 1998, but output in the early months of 1999 from new plants is expected to increase supply. Most units are currently operating at good rates, according to pace.
hdpe producers have given up on their proposed 5¢/lb price hike, which was to take effect Jan. 1. The reason for this is that demand for hdpe for film applications is significantly less than demand for blow-molding-grade hdpe. For that reason, many producers have revised the price hike to 3¢/lb. According to respondents to our survey, the price increase is not likely to stick.
Operating rates are up; currently they are slightly higher than 91%. pace forecast the annual production of hdpe this year to be almost 13.5 billion lb/yr, up from about 13 billion lb/yr in 1998.
Talkback
Related Content
Related Content
Sponsored Links
View All Blogs
Now Playing:
