US PE producers push for 11 cent/lb Dec-Jan hikes

01 December 2010 22:29  [Source: ICIS news]

HOUSTON (ICIS)--Several US polyethylene (PE) producers nominated 6 cent/lb price increases to take effect 1 January, in addition to 5 cent/lb ($110/tonne, €85/tonne) proposals set for December, buyers said on Wednesday.

Last week, sources said they expected the December price hike initiatives would stall, but news of another ethylene plant outage and the January price increase announcements were causing worry among PE buyers.

Price increases tend to be a tough sell in December as downstream industries manage down inventories and take turnarounds before the end of the year.

If the 5 cent/lb increase were to be fully implemented, it would be the first December contract increase for US PE since the winter of 1994-1995, according to ICIS price histories.

Over the past 10 years, December PE contract prices have rolled over six times and dropped four times.

It was too early to predict with certainty the outcome of December price discussions, but buyers were concerned that PE producers might use the recent rash of ethylene plant outages as justification for pushing through price increases.

A buyer said November price hikes of 4 cents/lb were “force-fed” to the market, and producers were enjoying healthy margins on PE.

“When you compare what we’re paying now versus a year ago, it doesn’t make sense,” the source said.

Following an increase in November, domestic prices for high-density PE (HDPE) blow-moulding grade were at 65.00-67.00 cents/lb DEL (delivered) in bulk, as assessed by ICIS.

Major North American PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, Total, NOVA Chemicals and Formosa.

($1 = €0.77)

For more on polyethylene visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect
Paul Hodges studies key influencers shaping the chemical industry in Chemicals and the Economy

By: David Barry
+1 713 525 2653

AddThis Social Bookmark Button

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.

Printer Friendly

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