Dow seeks R300/tonne hike for Brazil PE in second March increase

12 March 2010 23:17  [Source: ICIS news]

HOUSTON (ICIS news)--Dow Chemical is seeking a substantial price hike for all grades of polyethylene (PE) in Brazil, effective on 15 March, the second increase for the month, sources said on Friday.

The producer is seeking Brazilian reais (R) 300/tonne ($169/tonne, €123/tonne) for the second half of the month, in addition to a hike of R200/tonne implemented in the first half of March.

Prior to the second increase, Brazilian prices for low density PE (LDPE) were roughly $2,200/tonne and higher, while prices for high density PE (HDPE) stood about $2,150/tonne and higher, according to global chemical market intelligence service ICIS pricing.

The price of linear low density PE (LLDPE) was somewhere in between those two grades.

The measure was justified by unrelenting increases in the price of ethylene and a tight supply situation in South America, aggravated by the earthquake in Chile that has stopped the Dow plant in Talcahuano, sources said.

A similar measure was also observed in Argentina, where Dow announced a $100/tonne increase for 15 March, in addition to a similar amount already implemented in the first half of the month.

Prior to the increases, LDPE prices in Argentina were roughly $1,950/tonne while HDPE prices were $1,760/tonne and higher. The price of LLDPE was somewhere in between those two grades.

It was not certain if the initiatives would succeed totally or partially, but transformers had few alternatives.

The measure could succeed in Argentina, where Dow is the sole producer. Brazilian PE exports to Argentina have diminished of late, as domestic supply was also tight.

In Brazil, Braskem and Quattor had not announced price increases for the second half of the month, which could put a damper on Dow’s initiatives.

($1 = R1.77)
($1 = €0.73)

For more on polyethylene visit ICIS chemical intelligence
ICIS has launched weekly pricing reports in Africa for polyethylene and polypropylene. For more information contact Nadine Spoeri
To discuss issues facing the chemical industry go to ICIS connect

By: George Martin
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