The US high density polyethylene blowmolding export assessment fell to its lowest level in more than six years Wednesday as weak global demand and cheaper feedstock prices continued to pressure resin markets.
The HDPE blowmolding assessment was at $970-$992/mt (44-45 cents/lb) FAS Houston on Wednesday, the lowest since October 14, 2009, Platts data showed.
Deals for bulk export rail cars from producers to traders were talked in the low 41-42 cents/lb range, with expectations that prices could move lower in the coming days. The FAS Houston assessment factors in packaging and transportation to port costs of around 3 cents/lb ($66/mt), per market feedback.
Market participants indicated than increased volumes of blowmolding and HDPE high molecular weight film began hitting the export market late last week, and prices have continued to move lower in recent days.
Weak buy interest from Latin America, a pivotal outlet for US resin, has forced sellers to look to Asia to move larger quantities, and as a result, producer pricing was inching lower to adjust to levels in China, sources said. Demand in China also has been slower than usual, sources said.
Exports have been a challenge for some US sellers, who in addition to weak demand are also having to contend with tough economic conditions in other regions, lower oil prices and a strong US dollar against local currencies, sources said.
The FAS Houston blowmolding assessment has fallen by more than 6% since the start of January, according to Platts data.
Domestic polyethylene prices also have been under pressure, and contracts appear to be headed for a decrease after producers entered the new year still attempting to implement a 5 cents/lb increase. Last week, Formosa Plastics told customers it would lower January domestic prices by 3 cents/lb. Other producers are expected to move lower before the end of the month, sources said.
Market players also have kept a close eye on upstream ethylene, where spot prices have fallen to levels not seen in seven years. US Gulf Coast spot ethylene was assessed Wednesday at 15.5-16 cents/lb FD USG, a range last seen in late 2008, according to Platts data.
Ethylene contracts settled for December at a monthly net transaction price of 25.75 cents/lb, the lowest in 13 years, according to Platts data.
