Skip to Main Content

2017: The year the new PE capacity becomes a reality

December 28, 2016

Source: Frank Esposito

Department: Plastics News

The North American avalanche of polyethylene heard rumbling in the distance in recent years will become reality in 2017.

The question now becomes how much of this material will need to be exported outside of the low-growth domestic market – and what impact this deluge of material will have on selling prices.

Capacity additions from Braskem Idesa, Ineos Sasol and Nova Chemicals will have added more than 4 billion pounds of PE capacity in North America by mid-2017. Additions from Dow Chemical, ExxonMobil Chemical and Chevron Phillips Chemical are expected to add another 7 billion pounds by the end of the year.

Low 2016 demand growth in the U.S. and Canada will need to be supercharged in 2017. Through October, regional high density PE sales were up less than 2 percent, According to the American Chemistry Council, with low density PE sales down almost 3 percent and sales of linear low density PE down 0.5 percent.

Exports accounted for 20 to 25 percent of sales of each of these types of PE in the 10-month period. Market watchers have suggested that number will have to hit 30 percent or more to handle the oncoming PE.

Dow and ExxonMobil each are bringing on more than 3 billion pounds of new capacity in Texas. Dow’s growth project is in Freeport, while ExxonMobil is adding two new PE production lines in Mont Belvieu.

Read the full 2017: The year the new PE capacity becomes a reality article.

Global Equity Consulting, LLC is engaged in driving profitable growth and value primarily for small and mid-size businesses and their owners as well as the private equity firms who may have a stake in these businesses.

Posted in News