04 March 2011 00:18 [Source: ICIS news]
HOUSTON (ICIS)--US polyethylene (PE) sellers implemented a portion of their 5 cent/lb ($110/tonne, €79/tonne) February price increase initiatives with support from rising crude oil and international PE prices, buyers said on Thursday.
A large film manufacturer said most of its suppliers raised prices by 3 cents/lb in February, but a couple held the increases until 1 March.
Attention is now shifting to March contract prices, and producers were taking firm initial stances, invoicing an 8 cent/lb increase to customers.
The 8 cent/lb increment is made up of the remaining 2 cents/lb held over from February and a separate 6 cent/lb price hike that has been pending since January.
“I think it’s a question of an additional 2 cents/lb in March,” a buyer said. “I can’t imagine the plus-six being in play unless [crude oil] does something dramatic.”
Dow Chemical notified its customers on 3 March of an additional 5 cent/lb price initiative for April.
Producers maintained that the February price increases covered all grades, but high density PE (HDPE) prices were relatively soft in February.
Brokers had ample availability of competitively priced HDPE spot material. However, prices have firmed in March, sources said.
A buyer speculated that producers might need to drop PE prices in the second half of March to boost exports and dress up inventories for quarterly financial reports.
But producers were waiting to see how quickly international prices would rise to meet the higher quotes for March US exports.
“International pricing is driving the market,” a seller said. “China should pick up soon.”
The seller predicted increased PE demand and prices in China, especially if the situation in Libya remains chaotic a week from now.
Major North American PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, Total, NOVA Chemicals and Formosa.
($1 = €0.72)For more on polyethylene, visit ICIS chemical intelligence
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