29 July 2011 17:49 [Source: ICIS news]
HOUSTON (ICIS)--US July contract prices for polyethylene (PE) fell by 3-4 cents/lb ($66-88/tonne, €46-62/tonne), based on weak domestic demand, sources said on Friday.
With the reduction, prices for linear low density polyethylene (LLDPE) butane film were at 71-74 cents/lb DEL (delivered), low density polyethylene (LDPE) film prices were at 80-82 cents/lb DEL and high density polyethylene (HDPE) blow moulding prices were at 69-71 cents/lb DEL, for small-volume buyers, as assessed by ICIS.
Producers had announced earlier in the month that prices would fall by 3 cents/lb for all grades of PE resins. However, many customers were able to argue for an extra cent, depending on the amount of the decrease they were given in June.
"Our formal position for July is 3 cents/lb down … however, we are meeting competitive offers," said one producer, who indicated the competitive position was to take buyers down by a total of 7 cents/lb for June and July.
At least two buyers indicated prices fell by as much as 5 cents/lb for certain grades, but those decreases were not believed to be representative of the market.
Producers have already announced plans to raise prices by 5 cents/lb on all grades by 1 August. However buyers say they expect it will be difficult for producers to push through an increase before September.
"Typically, you have to have a demand spike to really get yourself a true price increase," said one buyer, who added that demand does not tend to return until September.
Major North American PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, Total, NOVA Chemicals and Formosa.
($1 = €0.70)
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