December US polyethylene contracts were heard settling flat ahead of the Christmas holiday, with many market participants expected to be absent until the beginning of January.
Multiple sources said this week they were calling the month a rollover, but noted that full settlements may not be reached until the first week of January.
A flat settlement had been anticipated by multiple sources in recent weeks despite a push from some buyers to lower contract prices in both November and December.
With word of the rollover, December high-density polyethylene contracts were assessed for blow molding at 79-80 cents/lb ($1,742-1,764/mt) for delivered railcars, for injection at 79-80 cents/lb ($1,742-1,764/mt) for delivered railcars and for high-molecular weight film at 82-83 cents/lb ($1,808-1,830/mt) for delivered railcars.
Domestic linear low-density contracts were assessed at 75-76 cents/lb ($1,653-1,675/mt) for delivered railcars. Low-density polyethylene domestic contracts were assessed at 88-89 cents/lb ($1,940-1,962/mt) for delivered railcars.
Once fully accepted, December would mark the third straight month of flat settlements after a 5 cents/lb increase was implemented in September. There had been talk in the market that a December decrease was possible after industry statistics released mid-month showed a slight uptick in producer inventories during November.
However, sources said producers were able to export PE to other regions — particularly South America and Asia — helping to keep inventories at a more comfortable level. With domestic demand talked relatively flat in December, sources said producers had incentive to export as they tried to avoid year-end inventory tax hits and keep inventories at a level where domestic contract pricing wouldn’t decline.
Domestic demand is expected to increase in January as buyers restock inventories. Market sources have said a first-quarter increase was possible, with producers most likely looking to February for a hike.
Source: Platts.com
