Market and product

US May polyethylene (PE) contracts rolled over, most buyers and sellers said on Thursday, marking the first flat month for the polymer in 2016.

The rollover came after gains in March and April, supported by planned outages in the plant turnaround season, a big drop in inventory during May and restricted production because of a force majeure by LyondellBasell earlier in the month.

Dow Chemical issued a 5 cent/lb ($110/tonne) increase for May but got no traction on the proposal.

US PE started the year with two monthly declines of 3 cents/lb each, in January and February.

A distributor said there was some doubt about the settlement because it was unclear whether buyers of high-density PE(HDPE) received a price cut on their material during the month. But the consensus among most other sources supported a rollover.

A widespread market opinion holds that the recent startup of the new Braskem Idesa plant in Mexico should bring contract prices down in June or July because of the additional new capacity.

Ethylene XXI in Veracruz is a 75:25 joint venture between Brazil’s Braskem and Mexico’s Idesa. The project includes a 1.05m tonne/year ethane cracker, plus a 750,000 tonne/year HDPE unit capacity and a 300,000 tonne/year low density PE (LDPE) plant.

Major producers include Celanese, Chevron Phillips Chemical, Dow Chemical, DuPont, ExxonMobil, Formosa Plastics, Ineos, LyondellBasell, Nova, Total and Westlake.