Americas PE markets brace for November price push amid seasonal uncertainty

Polyethylene market participants across the Americas expect price increases to be attempted in November but remain cautious about their sustainability ahead of the year-end.

Several US polyethylene producers have announced price increases of 5-7 cents/lb for November. Market participants remain divided on whether the hikes will hold amid uneven regional demand and the typical fourth-quarter inventory sell-off.

"It is weird producers are so bullish this time of the year," a US trader said.

Sources said that PE prices have been supported in October by strong demand from markets in Asia and Africa, giving sellers leverage despite subdued demand in Latin America.

The first trader said that if Asian demand remains strong, there might not be a material dump from US producers this year. However, if demand weakens, supply may build up, putting downward pressure on prices. "It is difficult to decipher," the source added.

US polyethylene prices often face downward pressure toward the end of the year as holiday trading slows and facilities shut down. If supply is ample, year-end destocking by producers to avoid inventory taxes can put additional pressure on prices and briefly boost demand.

Market feedback indicated that external factors, such as crude oil prices and geopolitical disruptions, continue to influence sentiment, with many buyers waiting for clearer signals before making significant purchasing decisions.

The Brazilian market is also expected to face price increases for both imported and domestic material, as market discussions indicate that local producer Braskem will announce increments for November.

"Braskem will try to implement in November the price increases announced for October," said a Brazilian trader who sells in the domestic market. Despite Braskem's price increase announcements from August to October, domestic PE prices did not rise in line with them.

Braskem did not comment on a request for details about the November price policy.

According to a Peru-based distributor, historically, prices should start to decrease in November. However, this year may be the exception, as producers continue to push prices higher amid the conflicts in the Middle East.

On the other hand, a second US trader said that while November prices from producers could increase by a couple of cents or remain flat, they still have inventories from October for some grades that they haven't been able to pass the full cost increase on to customers based on the West Coast of South America.

In Mexico, local producer Braskem Idesa announced a $120/mt increase for the domestic market will take effect on Nov. 1.

A Mexico-based distributor said it believes converters will purchase only what is essential in November while waiting for prices to decline. As sales of their finished products are low, demand for resins is currently limited.

In Mercosur, the outlook remains uncertain, as local producers have yet to clarify their positions, despite imported materials arriving at higher prices.

An Argentina-based distributor said that operations are set to slow down significantly due to several upcoming local holidays, in addition to the already weakened purchasing sentiment caused by the seasonal slowdown.