- Natural pellets fall 7 cents on day
- Demand remains robust ahead of spring
The US natural recycled high-density polyethylene markets saw mixed price movements Jan. 19, with feedstock bales seeing slight day-on-day gains while downstream pellets saw significant declines.
S&P Global Platts assessed natural HDPE bales up one cent on the day at 61 cents/lb, based on a pricing indication for material sold at that value and assessed under an offer received at 65 cents/lb.
Meanwhile in the mixed-color market, HDPE post-consumer bales held steady on the day at 26 cents/lb based on market talk of pricing between 25-27 cents/lb.
Market sources have said prices for both natural and mixed-color feedstock have stayed relatively stable so far in January, though one source noted bullish price expectations come March as processors start to build volumes for furniture and pipe manufacturing.
Downstream, natural recycled HDPE pellets for blowmolding applications fell seven cents/lb on the day to be assessed at 120 cents/lb, based on an indication received at 123 cents/lb for delivered material and another received at 120 cents/lb.
Trucking fees in the Midwest have been talked between 2-5 cents/lb by market participants.
Despite falling downstream prices, sources said demand for rHDPE remains robust despite its premium to prime HDPE resin as the two markets were talked "loosely decoupled" from one another.
HDPE blow molding was assessed at $1,323-$1,345/mt (60-61 cents/lb) FAS Houston basis, $11 lower on pricing talked at 57-58 cents for railcars. There was market sentiment that pricing would continue to fall through the beginning of February.
"There is a boatload of new [virgin] capacity coming online this year and I suspect recycled buyers are trying to look for guidance there," said a source.
That new supply includes 1.3 million mt/year of new linear low and high density PE capacity at Exxon Mobil and SABIC’s joint-venture petrochemical complex slated to come online before year-end. Shell Chemicals also plans to start up a new complex in southwestern Pennsylvania in H1 2022 that will include 1.6 million mt/year of LLDPE and HDPE capacity.
However, market participants are keeping an eye on the impacts of higher crude oil prices on downstream resin markets.