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Aggressive US PE prices find way to Türkiye, Africa amid year-end stock clearing

by Merve Madakbaşı - mmadakbasi@chemorbis.com
  • 27/11/2023 (10:25)
As sluggish activity came to the fore amid players’ willingness to close the year with low stocks in several markets, US suppliers boosted their exports to major PE outlets. Aggressive ex-USG cargos emerged in Türkiye, Morocco, and Nigeria in November at aggressive prices, while these cargos also formed the low end of Asian markets.

Falling upstream costs play a role in downtrend

Industry players pointed to lower crude oil, ethane, and ethylene prices in the US as one of the reasons that weighed on suppliers. The year-end lull that kicked off in major PE markets added to the strain, let alone healthy inventories in the country. Although domestic supply was down in October from September, as per ACC (the American Chemistry Council) data, inventories soared by 259 million lbs (nearly 120,000 tons) from the corresponding period in 2022.

US LLDPE, HDPE inj. hit the low-$900s/ton CIF Türkiye

Türkiye has been under mounting pressure from competitive ex-USG cargos since late October. Aggressive offers for LLDPE C4 film and certain HDPE grades caused regular Middle Eastern suppliers to lose their competitive edge, and the bear run gained momentum this month.

Following gradual discounts. US LLDPE C4 film prices moved down to $920/ton CIF Türkiye, subject to 6.5% customs duty, cash. Some consumers said, “We may consider engaging in these cargos to have some material on the way for arrival in February and March if prices touch or break slightly below the $900/ton CIF mark.”

American HDPE injection offers have already hit the $900/ton threshold on the low end. A trader said, “We heard that fresh materials from Shell’s new complex emerged for certain HDPE grades.” In the meantime, US HDPE blow moulding made a scene as low as at $930-940/ton with the same terms.

In the meantime, LDPE film and HDPE film prices lacked competition power compared to Middle Eastern cargos, as players put it. This was because the US supply for these grades was not that ample. Accordingly, US LDPE was reported at $970/ton CIF on the low end, while HDPE film stood at $940-970/ton this week with not much buying appetite.

Ex-USG PE offers weigh on Middle Eastern producers in Africa

Similarly, players in Nigeria and Morocco received an increased number of irregular US PE offers this month. These cargos provided a competitive edge as compared to the Middle Eastern prices.

A Nigeria-based trader reported receiving US LDPE, LLDPE and HDPE prices that stood $50-100/ton below regular Middle Eastern offers. In Morocco, US offers have already broken below the $900/ton CIF Casablanca mark for LLDPE and HDPE, while LDPE hit below $950/ton with the same terms.

US PE forms low ends in Asia; Vietnam sees aggressive HDPE inj. offers

Some US volumes also found their way to Asian markets moving into the year’s end, although not necessarily with aggressive prices. In China, American LDPE, LLDPE, and HDPE film prices stood at or close to the low ends of the market. Yet, they lacked competitive power amid prices at par with the lowest Middle Eastern offers.

Looking at Southeast Asia, LLDPE C4 film prices out of the US stood $20/ton below the lowest Middle Eastern offer in Malaysia. In Vietnam, US LLDPE film and HDPE b/m traded at a similar discount to regular origins. Meanwhile, American HDPE inj. as low as $870/ton CIF Vietnam offered a quite competitive edge.

US PE exports surge 22% on year in January-September 

Data from ChemOrbis Stats Wizard suggested that the USA boosted its PE exports by almost 22% in the first nine months of 2023 as compared to the same period last year, bringing the cumulative volume to 9.8 million tons. Among destinations of American PE, China shone out as the country imported around 2 million tons of PE in January-September, up from just 730,000 tons in the corresponding period of 2022. US PE exports into Malaysia, Türkiye and Singapore also indicated modest increases year-on-year.

USA – PE – Export Statistics 

To track polymer imports and exports across countries, please see ChemOrbis Stats Wizard.

Does further US pressure lurk ahead for December?

Some players expect American PE cargos to continue to flood global PE markets next month in tandem with traditional year-end stock clearing. This is also bearing in mind that seasonal factors, including the year-end festivities and winter in the North Hemisphere, may keep activity limited across the board, along with volatile energy futures.

According to ChemOrbis Production Pro, Baystar Polymers started up its 625,000 tons/year HDPE plant in October. Export markets may start to receive fresh materials from the new unit in Q1 2024, in line with possibly ramping run rates. Global PE markets welcomed about 3.2 million tons/year and 5.3 million tons of PE capacity in 2022 and 2023, respectively. The USA accounted for 70% and 12% of these additions, adding to supply pressure at a time when economic headwinds curbed consumption.

To track global plant news, please see ChemOrbis Production News Pro.
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