04 November 2010 19:23 [Source: ICIS news]
HOUSTON (ICIS)--US polyethylene (PE) contract initiatives for a 4 cent/lb hike in November and a 5 cent/lb increase in December have gained momentum after a supply-driven surge in the feedstock ethylene spot market, buyers said on Thursday.
Producers sought a 4 cent/lb ($88/tonne, €62/tonne) increase in October and have announced another 5 cent/lb increase for 1 December.
“We got the roll on the [October] 4 cents/lb until 1 November, but we are completely expecting that to hold for November,” a large buyer said.
Other buyers echoed the sentiment that the 4 cent/lb increase was a “done deal” for November contract pricing.
With spot ethylene prices rising fast, buyers expressed growing concern that the 5 cent/lb December initiative could also hold.
“I was laughing about it, but now I am more afraid to see it,” a buyer said.
The rapid turnaround in sentiment seems to have taken many by surprise.
“Last week the resin companies thought things were stabilised, and the [5 cent/lb December] increase letter was to shore things up,” a source said.
“Now we’re seeing large price swings for ethylene, the dollar is worth less, and PE exports look good.”
($1 = €0.71)
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