US May PE price hikes taking hold
18 May 2007 18:42 [Source: ICIS news]
HOUSTON (ICIS news)--Some price increase initiatives for US May polyethylene (PE) were going through but the new levels have not been clearly defined yet, market sources said on Friday.
Buyers and sellers said the proposed 4 cents/lb ($88/tonne) price increase on non-hexene grades of PE as well as the 7 cents/lb hike on hexene grades intended for May implementation were holding.
The increases were supported by market firmness, strong export demand combined with moderate domestic demand, low producers’ inventories and restricted availability of hexane copolymer, market participants said.
A trader, however, indicated that large buyers were negotiating lesser increases on May contracts that were more in line with the feedstock ethylene monomer increases.
A 5 cents/lb hike on PE remained on the table for 1 June implementation, in addition to the May hikes.
PE prices were up 3 cents/lb in February and up again 3 cents/lb in March. Prices were flat the following month after nominations at 4 cents/lb for non-hexene grades PE and 7 cents/lb for hexene grades were postponed to May.
Although domestic demand was gauged as slow, US PE buyers said producers were not shipping volumes greater than contract commitments. Additionally, not much material was available from brokers, and only at higher May prices, according to sources.
Market participants said availability of all grades of PE was snug. Sources added that high density PE (HDPE) film grade was particularly tight, while low density PE (LDPE) was gauged as not readily available.
US PE producers are Dow Chemical, Equistar, Chevron Phillips, ExxonMobil, and Formosa.
US benchmark domestic bulk prices for high density PE (HDPE) injection grade stand at 55-58 cents/lb, according to global chemical market intelligence service ICIS pricing.
By: Ron Coifman
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