Higher US PE prices seen into September

24 August 2007 17:34  [Source: ICIS news]

HOUSTON (ICIS news)--Buyer and seller indications point toward higher polyethylene (PE) US prices into September, industry participants said on Friday, but the level remained under discussion.

Current US benchmark domestic bulk prices for high-density PE (HDPE) injection grade stood at 64-67 cents/lb ($1,411-1,477/tonne), according to global chemical market intelligence service ICIS pricing.

Suppliers indicated that full implementation of a 4 cents/lb hike proposed for September is in line with a firm domestic PE market and strong global demand, but buyers said the increase may eventually settle at a price under the nominated value.

Most PE producers postponed the 4 cents/lb price increase to September from August, and sources generally assessed the PE market as stable through August.

However, a major supplier said the 4 cents/lb hike has been successfully implemented in August.

An additional 5 cents/lb price hike was also on the table for 15 September or 17 September, depending on the producer. Buyers, however, indicated that the second September initiative was not likely to be successful and was mostly intended as support for the earlier 4 cents/lb nomination.

Global demand continued to be reported as robust, with substantial volumes still going to Europe, the Middle East, Africa and Latin America. Although US PE sales to China remain healthy, activity has diminished from the volumes reported at the beginning of the year, according to traders.

Market sources said PE supplies remained snug. Sources indicated that high-molecular-weight high-density PE (HMW HDPE) was particularly tight.

Low-density PE (LDPE), especially heavy duty material, was difficult to obtain, according to market participants. However, blow moulding and injection grades of HDPE were assessed as readily available.

US PE producers include Dow Chemical, Equistar, Chevron Phillips, ExxonMobil and Formosa.

($1.00 = €0.74)
By: Ron Coifman
+1 713 525 2653

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