US Polyethylene Prices to Remain Strong in Early 2021 Following its Skyrocketing International Values

US will witness potential opportunities to widen its profit margins, amidst the ongoing surge in international prices and tightened supply across the region. The expected ease in Polyethylene prices for 2021 has been offset by the shutdown of Braskem Idesa’s Polyethylene plant with a capacity of 1.15 million tonnes per year in Mexico.

The plant was shut on 1^st December following the shortage in the supply of feedstock natural gas due to the rift over unfair negotiations with the supplier Cenagas. As restart of this plant has not been announced till date, this abrupt turnaround is perceived to widen the demand and supply gap in Mexico.

Thus, limited supply and soaring prices of Polyethylene in Mexico are expected to provide a silver lining to the US producers eyeing to expand their export potential. Even before the shutdown of Idesa in Mexico, consistent surge in global Polyethylene prices languished the hopes of the US for a quick drop in Polyethylene prices by early 2021.

With Polyethylene prices rising by 12 percent in China since mid-November, US export prices have already witnessed a considerable upsurge in December. As 3.8 million tonnes Polyethylene capacity is scheduled to come onstream in the Asia Pacific region during the first half of 2021, supply of Polyethylene is anticipated to lengthen which is perceived to taper-off the pricing curve gradually. As per

ChemAnalyst, “Although sturdy downstream demand from packaging sector is expected to keep its prices in upward trend in early 2021, its prices will eventually decline in the second half of 2021, influenced by considerate capacity additions and anticipated stability in the demand trend.”