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PetroChem Wire's Daily Wire provides closing prices and a summary of the day's trading activity for US ethylene, proylene, polymers and upstream NGLs markets. Begun in 2007, its olefins and polyolefins prices serve as benchmarks for a number of physical and swap contracts that trade on the CME/NYMEX Clearport system.

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US PE exports surge in 2018, led by new LLDPE production

HOUSTON, March 6, 2019 (PCW) -- The US exported 6.486 million mt of polyethylene (PE) in 2018, 2.064 million mt (47%) higher than the 2017 total of 4.421 million mt, the US Commerce Department said today.

Among the different grades of PE, LLDPE higher alpha olefin copolymers (LLDPE HAO) were the fastest growing export product, rising 1,255,032 mt (146%) to 2,117,280 mt in 2018.

That category includes conventional and metallocene catalyst-based LLDPE hexene and octene copolymers, which were the focus of recent capacity expansions along the US Gulf Coast by companies such as Dow Chemical, ExxonMobil and Chevron Phillips.

Other types of PE had more modest year-on-year export growth: LLDPE butene was up 22% at 790,102 mt, LDPE was up 19% at 942,824 mt, and HDPE was up 26% at 2,559,020 mt.

The new LLDPE HAO export volume was targeted at several key markets, especially Europe. Belgium was the recipient of 428,342 mt in 2018, followed by Brazil at 268,741 mt and Singapore at 147,565 mt.

A Strain on Logistics

The surge of PE export volumes has presented additional logistics challenges for producers and traders as they work to packaged the material in 25 kg bags, place the bags in containers, deliver the containers to the port, and load them onto container ships.

Packaging warehouses in the Houston area have high levels of bagged inventory, and some are requiring permits for new hopper cars to be shipped in for packaging.

Truckers are in tight supply for moving containers to the port, and outbound vessel space is more limited, especially on routes to Africa.

PE producers have been diversifying their export routes, but the Houston area remains the primary outlet for PE exports. -- David Barry

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