Polyethylene North America monthly market overview August 2019

Despite polyethylene markets performing below expectations in 1H 2019, the market is showing some signs of improvement in Q3. Following a weak Q2, demand for all grades have shown improvement in July and are projected to remain relatively strong in August, but will continue to remain below August 2018 levels. The rigid packaging and non-durables sectors were healthy, but generally, the automotive, industrial and retail sectors were soft. Inventory levels have strengthened in Q3 with the start-up of ExxonMobil’s 650kt LLDPE plant in Beaumont, Texas, in early July increasing domestic supplies and boosting stock levels. Export volumes have surged by almost 30% YTD July 2019 compared to the same timespan in 2018 and will continue to grow with the addition of the new export-focused capacity. Margins have started to weaken as polymer prices remain steady and feedstock costs recover from their historic low in June.