In the United States, production has improved, but existing contract orders are filled first, leaving little supplies for spot sales

Although weeks ago many predicted that the rise in raw material prices would present a downward trend, during June the prices of plastic resins remained high and for July further increases are expected in the US market.

Despite stronger production rates already, premium resin produced in the United States is still very difficult to obtain on the spot market, as sales allowances remain in place for many producers.

Why aren’t prices dropping?

In Europe, the lack of raw materials for the plastics processing industry is expected to last until the last quarter of 2021, according to the German publication Kunststoff Information.

In the United States, production has improved, but existing contract orders are filled first, leaving little supplies for spot sales. One producer, quoted by PlasticsExchange in its Market Update, indicated that produced resins will be out of stock immediately over the next two months due to order fulfillment.

Completed orders were mainly distributed in low density (LD) and linear low density (LLD) PE film, and the high density (HD) PE blow mold business which accounts for 81% of the total PE business from PlasticsExchange during the last week of June.

The other main raw material grades, HDPE film, LDPE injection and LLDPE injection, recorded moderate flow, accounting for 19% of the PE trading balance of the resin clearinghouse.

Meanwhile, all premium PE grades traded in June above US $ 1.00 / lb, except for high molecular weight HDPE film, which has reaffirmed to the upside again. The HDPE blow mold still had the biggest premium due to its scarcity and the impracticality of importing bottles from Europe.

Faced with this challenge, the month of July will be dominated by increases in the prices of the main plastic resins in Europe. Something that will inevitably be reflected in the markets of Central and South America.