China demand, feedstock costs to drive Q1 US PE hikes - Dow

02 February 2010 18:24  [Source: ICIS news]

HOUSTON (ICIS news)--Strong demand from China and rising feedstock costs may drive price hikes for polyethylene (PE) during the first quarter, Dow Chemical CEO Andrew Liveris said on Tuesday.

"The volume momentum through the fourth quarter - and we are not unique in this regard - built up as the quarter went by, and December was a strong month," Liveris told analysts during an earnings conference call.

Demand from China remained strong, while the US maintained its PE cost advantage versus other parts of the world, Liveris said.

At the same time, feedstock costs outpaced pricing, and operating rates remained in the low-to-mid 80s, Liveris said.

"We are not going to lose volume on these price increases," Liveris said.

"There is price momentum. There is good volume momentum," Liveris added. "We are out there pushing price hard."

Liveris said a 4-cent/lb ($88/tonne, €63/tonne) price increase was already in the market, while another 6-cent/lb increase was being planned.

US PE buyers said producers were planning to implement up to 8-cent price hikes in February, although the market was unlikely to support more than a 3-cent increase.

(Additional reporting by David Barry)

($1 = €0.72)

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By: Al Greenwood
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