The Global Polyethylene Market Is Facing The Pressure Of Oversupply
Source: global plastics
The abundant cheap ethane raw materials brought by the prosperity of natural gas shale in the United States provide a key supply cost advantage for polyethylene producers. However, with the construction of the first wave of new cracking units and polyethylene plants in the United States coming to an end, the global polyethylene market will face oversupply and price pressure in 2020, and the demand for polyethylene for the whole year is expected to lag behind.
Asia, Europe and Turkey face similar challenges: the global market is well supplied with resin against the backdrop of continued uncertainty caused by the slowdown in global economic growth.
In the first wave of entrepreneurship in 2017-2019, 13 new polyethylene plants will increase the annual capacity of polyethylene in North America by 35% to over 27 million tons. The 15 polyethylene plants planned to start in the 1920s will increase the total annual capacity of polyethylene in North America by another 26% to 34.35 million tons.
prices are showing the pressure of excess supply of polyethylene. By the beginning of November, the price of HDPE blow molding products had dropped 43% since the middle of March last year, to 782 US dollars per ton in FAS Houston. During this period, linear LDPE fell 41% to $772 / ton Fas Houston, while LDPE fell 37% to $871 / ton Fas Houston.
At least one new polyethylene plant will be put into operation in early 2020. This new polyethylene plant is the 550000 ton / year high-density polyethylene plant of leanderbusser company located beside the Houston shipping channel.
The new plant was due to start production in the middle of this year, but market participants expect price pressures from oversupply to delay the new plant until 2020.
"We don't think polyethylene prices will rise by the first quarter of next year," said one polyethylene trader. Globally, the supply of polyethylene is already very abundant. "
