West Coast Supplies

Polyethylene trading was solid the first week of Feb, demand remained healthy despite higher spot pricing as producers finally inked their $.04/lb January contract increase midweek (yes, actually during Feb). Pro-ducers seemed to be holding back railcar offers and few choice cars, mostly HDPE, reached the secondary market. Good liquidity was instead provided from resellers’ inventories and consequently, our trading desk hustled to complete dozens of mostly... truckload orders. Our spot PE prices were generally up $.01-.02/lb with variation seen between the commodities. LDPE and LLDPE film grades were still tight, while most HDPE resins were amply available, but still reversed some of their deep discount to other materials. So far in this young year, spot PE prices have already tacked on $.015 -.04/lb; the change in direction is viewed as healthy for a market, as prices cannot simply decrease for an eternity. While international trade continued to flourish, concern grew regarding the potential economic threat from the Coronavirus, somewhat spooking market participants. There is another nickel increase nominated for February, but let’s fully digest the Jan increase first See more

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Spot Polyethylene trading remained very active; we continued to see strong demand for LDPE & LLDPE resins sending these material groups $.01-.02/lb higher, while HDPE buyers only picked away with low volume orders and these prices held flat. Prompt availability of LDPE film grades was still scarce and incoming supply was quickly scooped up, while excess demand persisted into late Friday. We saw similar activity for high flow LLDPE injection grades, both pellet and granular. There is a $.04/lb price increase nominated for Jan PE contracts with some tacking on another nickel for Feb, still, at least one major consultancy has estimated PE prices flat for Jan, and some market participants see the possibility of a revision.

The spot Polyethylene market continued to be red hot, just as it has been since 2020 began. High volumes of LLDPE and LDPE, for both film and injection changed hands across our trading desk and pricing was firm, while HDPE interest remained lackluster and pricing stayed soft. PE buying was equally spread between processors and resellers with about half needed for immediate delivery and half ordered for February. Fresh producer railcar offers rem...ained scarce which encouraged suppliers to hold their ground and generally achieve higher selling prices. LDPE film in particular has been tight as many railcars from at least two different producers slated for December shipment did not roll until January, while new LDPE production has also been delayed. When the New Year chimed in, the long PE down-cycle had at a minimum been disrupted, at least in the spot market. Rising spot prices have been shrinking their discount from contracts, but it remains to be seen if there is enough momentum to implement the current $.04/lb contract increase slated for January. In the meantime, rising Ethyl-ene costs have impacted PE production margins, especially at the export floor price, so fresh Hous-ton offers have also started coming in a couple / few cents higher. See more

Spot Polyethylene trading maintained its strong momentum developed during the final week of Nov and com-pleted volumes continued to run above average. Pricing for all LDPE and LLDPE grades, both film and injection, were flat to firm, however HD grades shed a cent. Our trading desk was kept busy filling orders; however, the majority of transactions were actually booked to other distributors / resellers / exporters rather than processors. This was not ... super surprising as fellow suppliers have been thinning their inventories, perhaps preparing to procure sizable volumes if extra special deals are presented near year-end. In the meantime, there has been a serious run on spot truckloads (even 5 or 10 at a time) to fill in supply gaps and keep their processing customers amply supplied with material. This has created a premium for ready to ship truckloads even as fresh shippable railcars are generally discounted. The Polyethylene contract market seems to have accepted a $.03/lb decrease in November, although there is not necessarily industry-wide consensus. The decrease prompted some market participants to ask for an immediate and equal discount for spot material, so it is important to note that spot prices often change daily and this particular price reduction has already made its way into the market and then some. In fact, the discount that spot has developed to contracts and consultants’ indices has widened greatly during 2019. Our transactional prices have steadily deteriorated while contracts have netted out shockingly flat after gaining and losing 3 cents twice this year. The export market remains very healthy and has continued to grow, making new all-time volume re-cords as different regions continue to tap North American supply as a source of ultra-competitively priced mate-rial. See more

The spot Polyethylene market was surprisingly active during the Thanksgiving shortened week. Though our trading desk only completed an average volume of transactions, it was viewed positively given how many participants had already left for an early holiday break. Those buyers who inquired for material were presented with good fair market pricing and were not shy to transact. Deals were done in most grades, and some resins which had been tough to sourc...e, such as LDPE film, were quickly snatched up upon surfacing. Spot PE prices held firm, as supply was thin and buyers out to procure last minute material were in a weak position to negotiate. The contract market appears to be settling down $.03/lb for Nov, unwinding the Sept increase, which at the time was semi-surprising, but still palatable. The export market continued to be very active as international buyers flocked to North America for a cheap source of material. Heading into December, we expect more inventory shedding and surely some end of year steals as suppliers position their year-end inventories. Typically the month starts out busy and then grinds to a halt by the final full week, so please try to plan accordingly See more

The spot Polyethylene market continued to transact at a steady rate amid relentless pressure on prices. A glut of fresh railcars continued to flood both the US domestic and export markets, bringing good avail-ability for most grades, while also scaring away some buyers. All PE commodity grades slid another cent, except for weak LLDPE film, which dropped a deuce. Even those materials that were not abundant continued to be pulled lower by the overall momen...tum. Despite the weakness in spot pricing,there is still a $.04/lb increase nominated for November, but there is very little chance that it gets pushed through without a significant outside event occurring. Processors are getting vocal with their desire to see the $.03/lb September increase peeled off before year-end, but as we have seen time and again, producers will fight to keep their hard-earned increases. The export market remained very active, its ability to consume large slugs of material has producers’ attention, as they chase bids to move material, which brought new lowprices for this cycle. See more

Spot Polyethylene trading was good, but not great; our trading desk was busy quoting opportunities, but domestic demand lacked luster and buyers were reluctant to submit sizable orders. We have now seen this type of activity for a few weeks as buyers have seemingly been out to source their near-term needs while still considering their desire for minimal year-end inventories. Prices slid as suppliers competed for orders, which led to another w...eek of compressed margins. On the other side of the coin, special buys can be found as traders have also been thinning their inventories, so for those willing to buy in large volumes (multiple railcars), deep discounts can be had. Our spot PE prices dropped a penny on average with variance seen amongst grades. HDPE for injection lead the way lower, which also dragged film grades down about a half-cent despite being somewhat tightly supplied for immediate shipment. The hurricane season huffed and puffed early on, but seems to be winding down without much of a whimper. Given the current state of the market, the November $.04/lb increase is now doubtful and it might even be a challenge to keep the Sept $.03/lb increase intact through year-end. However, it again appears that we could be nearing the end of the trade war with China, and should it find a positive resolution, we would expect a sizable boost in both de-mand and prices. The added boost would be welcomed as this Thanksgiving holiday shortened month could use a burst of energy See more

Spot Polyethylene saw a strong close to October, though we fear some participants were spooked and left early on Thursday, since we missed our volume mark on Halloween afternoon.However, once the calendar flipped, the fog seemed to lift as buyers came back to life, welcoming November with a very nice day of deals.Our trading desk was quite busy working opportunities throughout the week, but domestic demand was slightly subpar, so the compet...ition for each order was tough. The offgrade domestic railcar market has also cleaned up somewhat; low ball bids were not interesting and those buyers that had a pressing need paid up. Most generic prime commodity grades were am-ply supplied, especially provided a 2-week lead time; our prime prices were mostly a half-cent lower this week, so we saw some price consolidation as the gap between offgrade and prime narrowed. The $.04/lb price increase nomination for October has been rolled to November, but it has not really been attempted. The export market remains active and healthy as both prime and offgrade materials con-tinue to find happy homes abroad. See more

The spot Polyethylene market managed to put together a pretty good trading week, but it was an uphill battle all the way. Our trading volumes were only average, no thanks to lackluster domestic demand and only lifted by healthy export sales. Domestic asking prices have edged higher over the past few weeks to get more in line with the $.03/lb contract increase implemented in Septem-ber. However, processors have begun to position for reduced year-end inventories, so ... orders were calculated and volumes were minimized as needed. As a result, deal-making was chal-lenged and supply was subsequently squeezed to achieve competitive pricing and consequently, trading margins were tighter this week. The Sept 3-cent increase is solid and the Oct $.04/lb nomination has been pushed off to November. As we touched on earlier, export is alive and well as other regions of the world continue to tap the US market for well-priced discounted material. If participants are willing to work thin, there are large incremental volumes ready to be moved through this channel. See more

The spot Polyethylene market seemed to find its groove as the pace ramped up again in October. Our trading desk was busy throughout the week filling a consistent flow of resin requests and finding homes for well-priced supplier offers. There has been a run on LDPE Clarity which has seen its premium again ex-pand nicely over other film grades; HDPE Blow molding has also caught a bid, driven by better demand and lack of spot supply.... While there is plenty of material available if one can wait 2 weeks for fresh railcars to arrive, prime material ready for immediate pickup can often be a challenge to secure as resellers seem to be limiting their uncommitted inventory kept on hand. Processors are recognizing the reality of the en-abled $.03/lb September contract price increase and we finally saw spot prices firm up a penny midweek. If prices continue to creep higher along with some sort of supply disruption or sustained bullish fundamental, the next $.04/lb increase could also prove viable.The wild card could be the escalation of Middle East tensions as an Iranian oil tanker was apparently attacked on Friday. The crude markets once again shrugged off this news and its not clear whether these smaller dust ups will have a lasting effect. Settling the trade dispute with China and lifting of sanctions would also be a boon to the markets, and while there have been signs of light, a full agreement remains elusive. See more