22 October 2008 22:26 [Source: ICIS news]
HOUSTON (ICIS news)--Prime polyethylene (PE) offers have dropped by as much as 12 cents/lb ($265/tonne, €201/tonne) this month amid weak demand and rising inventories, buyers said on Wednesday.
“There’s a surplus of material,” said one converter, adding that prices would continue to go down.
Customers in the film and blow moulding sectors saw October price drops of 11-12 cents/lb emerging this month after prices fell by 7-8 cents/lb in September.
PE buyers said the price decreases in September and October have wiped out all the year-to-date price increases.
One source said it expected the market to lose another 5 cents by early January.
A producer acknowledged the 7 cent/lb drop in September, but said the October decreases were not uniform. Competitive offers in certain end-use segments such as blow moulding and pipe were only down 6-8 cents/lb, the source said.
However, a blow moulder said multiple producers have called to solicit business at the discounted prices, bypassing the brokers.
After a restocking phase following Hurricane Ike, buying interest was sagging under the weight of broader economic concerns and the widespread perception that prices have not yet bottomed out.
The producer expected that October demand would be 10% down compared with September as converters throughout the PE market were thinning out their resin inventories.
One buyer said it did not expect to re-enter the market before mid-November, while another was holding off on any purchases until the end of this month.
US low density polyethylene (LDPE) liner grade prices were at 88-91 cents/lb in bulk at the end of September, according to global chemical market intelligence service ICIS pricing.
($1 = €0.76)
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