Spot US HDPE blowmolding falls to lowest price on record on bearish demand: sources

Houston — The spot US high density polyethylene blowmolding export price fell Thursday to the lowest level since S&P Global Platts began assessing it after sources said pricing from suppliers trended lower amid weaker consumer demand.

"The sentiment is extremely weak," a source said.

Since January 2, 2020, the assessment has fallen about 11% or $77. On a year-on-year basis, the assessment is down 34.5% or $330.

The FAS Houston HDPE blowmolding price fell $33 day on day to $618-$640/mt (28-29 cents/lb), with railcar pricing discussed at 25-26 cents/lb, the lowest pricing recorded since Platts started assessing it on October 17, 2011. The FAS assessment includes an additional 3 cents/lb to cover packaging and transportation costs.

The previous low on record was a 29 cents/lb rail car basis assessment that was unchanged from December 4 through January 6.

The price has mostly trended in the low to mid 30 cents/lb rail car in 2020, but in recent weeks, fell into the 20s after consumers halted purchases of non-essential items and players foresaw a weak outlook due to the coronavirus pandemic, a trader source said.

"Every day you wake up and it's a lower number. We don't know where the bottom is and if there isn't an indication for that buyers won't jump back into the marketplace until they have a sense where that bottom is," a third source said.

Many converters are completely shut down or running at reduced rates due to social distancing requirements to prevent the spread of the novel coronavirus, the source said.