02 October 2009 18:50 [Source: ICIS news]
HOUSTON (ICIS news)--North American polyethylene (PE) producers will have difficulty holding onto domestic price gains in the fourth quarter as export volumes begin to fade, a buyer said on Friday.
Over the past one to two months, producers and traders have said they have seen a lull in US PE exports to China, which led the export boom earlier this year.
The pullback in export activity could last through the end of the year, sources said.
Asian buyers are indicating bids, but at levels 10 cents/lb ($220/tonne or €152/tonne) below previous business, a trader said.
Meanwhile, domestic converters did not foresee any strength in fourth-quarter demand to pick up the slack in export trade.
A regional converter said it would take a cautious approach to the market in October.
“Typically you expect to see a lot of orders in October, but I have suspicions that because of the economy, people’s buying habits have shifted to not holding inventory,” the source said.
US PE producers said they implemented a 4 cent/lb increase on September contracts, but buyers gave mixed indications.
During the week ended 25 September, bulk high-density PE (HDPE) blow moulding grade for domestic delivery was at 52-55 cents/lb, according to data from global chemical market intelligence service ICIS pricing.
Major US PE producers include Dow, ExxonMobil, Formosa, INEOS, Total, Westlake and LyondellBasell.
($1 = €0.69)
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