Spot US LDPE climbs to highest pricing in 28 months

New York — The spot US low density polyethylene export price rose on the week Dec. 16 to the highest level in about 28 months, based on the grade being extremely limited and after a major pipeline shut Dec. 2, sources said.

S&P Global Platts assessed US spot export LDPE up $66 on Dec. 16 at $1,202-$1,224/mt (54.5-55.5 cents/lb) FAS Houston basis, with rail car pricing discussed at 52 cents/lb.

The FAS assessment includes an additional 3 cents/lb to cover packaging and transportation costs.

The previous high for US LDPE was Aug. 13, 2018 at $1,213-$1,235/mt (55-56 cents/lb) FAS Houston, with rail car pricing at 52-53 cents/lb.

Sources say they think the pricing could go even higher for the grade in the coming days and weeks as volumes remain extremely limited.

Braskem Idesa halted its activities Dec. 2, after the Mexican government agency responsible for transporting natural gas into the petrochemical complex shut the pipeline. Natural gas is the main feedstock used for power generation in the complex.

Mexican president Andrés Manuel López Obrador said at a Nov. 2 press conference that the gas contract has expired and will not be renewed.

Since the pipeline has been offline, there's a million tons of production being halted for PE including LDPE, high density PE blowmolding and HDPE injection grades.

"Until a firm startup date is confirmed, this is going to take its toll," and will be pushing prices up, one source said.

Pricing has been climbing since Nov. 18 and steadily increased or remained stable since from $1,091/mt (49.5 cents/lb) FAS Houston, with pricing rising about $122, or 11.2%

Since Jan 2, the assessment has rose about 46.7%, or $386 from $827/mt (37.5 cents/lb) FAS Houston. On a year-on-year basis, the assessment is up 44.7%, or $375 from $838/mt (38 cents/lb) FAS Houston.