15 July 2011 17:22 [Source: ICIS news]
HOUSTON (ICIS)--US polyethylene (PE) producers are expected to reduce July contract prices by 3 cents/lb ($66/tonne, €47/tonne) for all grades, market sources said on Friday.
Canada's NOVA Chemicals sent a letter on Friday to its customers announcing that it would reduce the price of all grades of PE resins by 3 cents/lb, effective 1 July, according to a copy of the letter obtained by ICIS.
NOVA also announced plans to raise prices by 5 cents/lb on all grades no later than 1 August, according to the letter, which states its position is based on current and expected PE resin and feedstock supply and demand dynamics.
Sources indicated that other producers will follow NOVA and also reduce price by 3 cents/lb.
One producer indicated it would grudgingly meet the competitive offer, adding that the price drop would eat into margins.
Buyers had been expecting a slightly larger price decrease of between 3-5 cents/lb. One buyer suggested the announcement was a pre-emptive effort to keep prices from falling further.
Prior to the July reduction, prices for linear low density polyethylene (LLDPE) butene film were at 74-77 cents/lb DEL (delivered), low density polyethylene (LDPE) film prices were at 84-86 cents/lb DEL and high density polyethylene (HDPE) blow moulding prices were at 72-74 cents/lb DEL, for small volume buyers, 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 = €0.71)
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