Export demand from Latin America continued to exert upward pressure on U.S. export prices for another week. The first round of exporter offers from producers sold out instantly, and numerous unmet demands were awaiting additional offers. Buyers in the region are still grappling with high freight costs and delayed shipments from Asia, which is directing them to the U.S. market for quick and competitive supply.
Producers are pushing for a three-cent increase in contracts.On the domestic side, June contracts have yet to clarify. Producers are pushing for another three-cent increase, and despite moderate spot strength, major buyers are backing down sharply as they digest the last three-cent increase. PlasticsExchange writes that this increase may need to wait until July, when another nickel is being proposed. It’s not unusual for price hikes to pile up in the summer if a hurricane significantly disrupts production.
Transactions are unusually high for this time of year.A modest flow of off-spec polyethylene (PE) and polypropylene (PP) offers saw several Prime railcars pulled back by buyers since the end of June. Volumes completed on the PlasticsExchange trading desk were high during the traditionally slow start of July. Both PE and PP prices rose due to the impact of stronger-than-normal demand, including a significant increase in packaged truckloads before Hurricane Beryl. As of the time this article was written, the storm is expected to regain strength in the Gulf before making landfall again at the Texas coast, which is filled with petrochemical complexes and plastic resin production facilities. Many producers announced plans to take precautions and keep their reactors idle before the storm hit.
11 storm systems forming in the Atlantic basin.This could be one of those years. The National Oceanic and Atmospheric Administration (NOAA) forecasted an above-average season and further elevated the outlook following the transition from El Niño to La Niña. As of July 11, millions of Texans were left without electricity, with some dealing with triple-digit temperatures. According to ICIS, when the Category 1 hurricane (the weakest class) made landfall in Texas, most of the disruptions it caused in the chemical industry were related to power outages. The global source of commodity intelligence added, “Companies halting operations as a precaution also caused an equal number of disruptions.” Meteorologists predict that 11 more storm systems will form in the Atlantic basin long before the period considered the peak season at the end of summer.
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