U.S. Resin Prices Seen Moving Lower in 2023

REUTERS, USA — Plastic resin prices appear set to move closer in what is left of 2023 to lower prices elsewhere in the world, particularly after the North American market started to feel the full impact of plants started in recent months, a market analyst for polymers said in an interview. Potential for a recession plus an increase in the need for exports, particularly polyethylene, are going to work together to help reduce the price” in what is left of the year, said an expert on the North American plastic resins commodities market, Esteban Sagel, in a recent interview.

While some producers are currently seeking price increases in their contracts, such price increases in resin supply contracts for polyethylene or polypropylene would be hard to justify “particularly in a market where domestic demand is not so strong,” Sagel added. Executives from several companies have voiced concern about demand.

U.S. polyethylene prices

“So right now, polyethylene prices, depending on the grade, are in the mid 60s cents per pound and polypropylene is in the higher 60s or 70s,” he said in an interview near the end of March.

There are recent polyethylene startups in the U.S., with Shell in Pennsylvania and Bayport Polymers in Texas, as well as by NOVA in Ontario in June 2023, he said. Nova completed mechanical construction in Ontario in late 2022. However, after these plants, the next project completion will only be in 2026, he added.

“We have a project in Canada for Nova chemicals for linear PE, then we have Shell just started in late 2022. Then Chevron Phillips and Qatar Petroleum have a very large project planned for early 2026,” he added.

Polyethylene projects

Sagel mentioned Dow´s plans to possibly expand existing capacity in Alberta. Dow has yet to confirm a project in Alberta to expand its polymers production capacity there. An FID had been expected by the end of 2022, but talks with local authorities continue with a decision anticipated before the end of the year, the company has said.

“Dow Chemical has a very large project in Canada for 2030 and Formosa had a project for Louisiana that had its air permits pulled by a judge in late 2022 but the State of Louisiana is fighting the ruling and it may come to production sometime in 2027, and finally, Sabic was talking about potential investments in Port Arthur (Texas) as well, so we have about 5.6 million tonnes of additional capacity projects between 2023 and 2030,” he said.