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.
($1 = €0.77)
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