Producers revise US July PE increase nominations

01 July 2009 23:57  [Source: ICIS news]

HOUSTON (ICIS news)--A US polyethylene (PE) producer split a proposed 8 cent/lb ($176/tonne, €125/tonne) increase for July into separate 4 cent/lb increments in July and August, and other producers were expected to also modify their initiatives, buyers said on Wednesday.

End-users said the proposed price hikes would only serve to expand producers’ margins at a time when downstream demand was lacklustre and resin export sales were expected to be less robust than during the first half of 2009.

A major producer saw an uptick in domestic demand during the second half of June that pushed June order volumes past the May total, even with several business days remaining in the month.

A buyer said the apparent resin demand surge was due to pre-buying activity. Producers could expect to face slow sales and building inventories during the first half of July that would put pressure on the increase initiatives, the source said.

Another buyer said PE export demand and ethylene feedstock costs would be the key factors in determining the course of the resin market in July and August.

LyondellBasell on Tuesday said it did not expect to see the current level of resin exports to Asia sustained during the second half of 2009, but the most prominent decline in export volumes would likely be in the fourth quarter.

Ethylene spot prices trended lower so far this week with July deals heard at 24 cents/lb, down from 25.25 cents/lb in the prior week.

US high density PE (HDPE) blow moulding was at 52-55 cents/lb DEL (delivered) during the week ended 26 June, according to global chemical market intelligence service ICIS pricing.

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

($1 = €0.71)

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By: David Barry
+1 713 525 2653

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