Polymer Prices Are Under Pressure From Lower Costs And Rising Inventory

Prices Of Polymers Undergo Downward Pressure As They Are Hit With Frail Demand

The US polyethylene (PE) and polypropylene (PP) market contract prices are under stress because of the consistent frail demand, which is not looking to get better anytime soon.

PP contracts for May were lower by 8¢/lb, aligning with the drop in prices for feedstock polymer-grade propylene (PGP). However, the prices of PE finally ended up settling flat following comprehensive negotiations where consumers pushed for price cuts, and manufacturers were pushing for increases in the next month while declining price cuts for May.

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On an official level, various PE producers proposed 3¢/lb raises in June contracts. However, consumers and manufacturers hint that the continued frail demand seen this year will likely result in lower prices in the present month.

In the US, demand is frail, and so is manufacturing and housing, which in turn has an effect on the demand for PE. Durables and non-durables still remain on the weaker end.

As spot prices for US ethylene and US propylene are at their lowest since August 2020 and December 2022, respectively, they have a competitive edge in some export markets that can give breathing room to producers looking to get rid of inventories and raise domestic prices. But this demand will not last as global markets also face the issue of high inflation and lower consumer expenditure with regard to the economy as a whole.

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According to the article by Procurement Resource, the US polyethylene (PE) and polypropylene (PP) market contract prices are strained as there is no demand in the market. The growth of polymers has come to a halt in the US. There is a shift in consumer buying patterns which has left to an oversupply of inventories. Although there is some support from export demand, it will not last for long.