24 August 2010 19:19 [Source: ICIS news]
HOUSTON (ICIS)--Continued low supplier inventories and a tight supply-to-demand relationship support a proposed 5-cent/lb ($110/tonne, €87/tonne) hike for North American polyethylene (PE), an official with NOVA Chemicals said on Tuesday.
Domestic demand continued to be strong, and the North American market had been able to hold at relatively-high export levels based on competitive natural gas costs versus crude oil, chief executive Randy Woelfel said during an earnings conference call.
He said the PE industry “continues to show very healthy capacity utilisation rates”.
NOVA’s first-half PE sales totalled 1.55bn lb, up slightly from 1.54bn lb a year earlier.
The first-half volume represented an 86% operating rate for NOVA’s 3.62bn lb/year of PE capacity.
NOVA’s earnings in the second half of 2010 were not expected to be as strong as the first half, it said.
“On balance, while we are encouraged by market dynamics in 2010, uncertainties remain in the outlook,” Woelfel said.
Among those uncertainties were the health of the global economy and new capacity additions in the Middle East and Asia.
US buyers have expressed strong doubts about the possibility of a September PE price increase, citing lower feedstock costs.
US domestic bulk PE prices were 56-59 cents/lb DEL (delivered), as assessed by ICIS.
Major North American PE producers include Dow Chemical, ExxonMobil, Formosa, INEOS, Total, Chevron Phillips Chemical, Westlake and LyondellBasell.
($1 = €0.79)
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