30 July 2010 20:10 [Source: ICIS news]
HOUSTON (ICIS)--At least two major producers nominated 5 cent/lb ($110/tonne, €84/tonne) September price hikes covering all grades of polyethylene (PE) amid firming demand and an uptick in feedstock spot prices, market sources said on Friday.
The move took some buyers by surprise, and there was no reason given in either of the two price hike letters sent to customers.
US PE contract prices for July dropped by 2 cents/lb, with the exception of a rollover in low-density PE (LDPE) prices, according to most market participants. Domestic PE prices have been falling since May.
The September PE increase announcements were seen as an indication that producers would seek to hold prices steady in August, according to participants.
Dow Chemical previously announced a 1 August price increase for LDPE and certain grades of linear low density PE (LLDPE).
No other producers followed Dow’s August announcement, but the September nominations could be a move to support the Dow increase proposal, sources said.
PE export prices were likely to increase, especially for LDPE, but traders did not yet have a good grasp of August price levels.
“I think [producers] are seeing firmness and trying to figure out if they can get away with raising prices,” according to an export buyer.
A PE producer said August-October is a time of peak domestic demand, and buyers were asking to buy up to double their normal volumes in anticipation of higher prices going forward.
Feedstock ethylene prices also showed signs of strength this week.
Spot ethylene for August delivery traded at 32.25 cents/lb on the Williams system early in the week, just 0.25 cents below some deals in the previous week. But the price for August jumped to 35.00 cents/lb on Thursday.
Sources said uncertainty about the duration of a Dow cracker outage in ?xml:namespace>
With July decreases pending, ICIS assessed US high density PE (HDPE) blow moulding domestic prices at 59-61 cents/lb
Major US PE producers include Dow Chemical,
($1 = €0.76)
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|