US PE outlook steady for April amid supply allocations - buyers

01 April 2010 19:37  [Source: ICIS news]

HOUSTON (ICIS news)--US polyethylene (PE) prices were steady going into April amid continued supply allocations by some producers and strong ethylene pricing, buyers said on Thursday.

Buyers expected flat or lower prices in April, with little support seen for producers’ 5-cent/lb ($110/tonne, €81/tonne) price increase nominations.

“I’m thinking April is flat at this stage. There is no sentiment for an increase next month,” a source said.

“But who knows what will happen, what incidents will come forth,” the buyer added, alluding to the uneven operating environment for the US Gulf ethylene industry during the first quarter.

While buyers agreed that prices were primed to drop at some point, the timing of the decrease was an open question.

“We think there is a chance of the price weakening in late April as suppliers start recognising that the price will fall in May and they want to start moving product ahead of the downward curve,” a source said.

Other buyers saw indications that prices could drop in April, but more likely in May or June, when the supply chain will have had more time to recover from first-quarter disruptions.

Market participants said double-digit price drops were possible later in the second quarter.

US high-density polyethylene (HDPE) for blow moulding was at 72-74 cents/lb DEL (delivered), according to data from global chemical market intelligence service ICIS pricing.

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

($1 = €0.74)

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By: David Barry
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