North American PE makers lower May price hike targets

29 April 2009 18:22  [Source: ICIS news]

HOUSTON (ICIS news)--At least two North American polyethylene (PE) producers lowered May price hike targets to 3 cents/lb ($66/tonne or €50/tonne), down from the previous 5 cents/lb, but even the smaller initiatives were unlikely to succeed, a buyer said on Wednesday.

“Our opinion is that they will not get the 3 cents/lb but are trying to keep the discussion away from lowering the current pricing,” the source said.

A third producer said it still intended to enforce a 5 cent/lb increase on 1 May that was postponed from April.

US PE demand in April was 10% stronger than in March, but still generally soft, a producer said.

“The US market is dead on PE,” another producer said. “So far the industry is supported by the Asia market.”

May shipments to Asia were selling well, but buyers in that region were increasingly reluctant to secure deep-sea cargoes from the US Gulf and elsewhere as alternative supplies became available from Middle East start-ups, the producer added.

US bulk domestic prices for high-density PE (HDPE) blow moulding grades were 46-50 cents/lb DEL (delivered) during the week ended 24 April, according to global chemical market intelligence service ICIS pricing.

Export prices for HDPE blow moulding were at 38-40 cents/lb FOB (free on board) US Gulf for bagged resin, compared with 35-37 cents/lb FOB USG a month earlier.

Major US PE producers include Dow Chemical, ExxonMobil, Formosa, Chevron Phillips Chemical, Total and LyondellBasell.

($1 = €0.76)

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By: David Barry
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