06 October 2011 21:31 [Source: ICIS news]
HOUSTON (ICIS)--US polyethylene (PE) contract prices were flat for September, after a final producer agreed to give up on a 5 cent/lb ($110/tonne, €83/tonne) increase for the month, sources said on Thursday.
There was some discussion that a few large PE buyers had received as much as a 2–3 cents/lb reduction in prices for September, but that information could not be confirmed.
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 have proposed a 5 cent/lb increase every month since May, but so far, it has not found traction.
Suppliers had some hope for success for an increase in early September with a few planned ethylene cracker turnarounds. But as ethylene spot prices fell by 22% during the month, those hopes largely faded, sources said.
Producers have said they will seek the 5 cent/lb increase in October, based on higher ethane prices.
"Ethane has spiked, which means that the cracker margins have shrunk," a producer said. "To restore [PE] margins, we are insistent that the five cents must go through."
However, domestic spot prices have fallen by as much as 5–6 cents in some cases, which buyers have said indicates that prices will slide in October.
"I think the market has 6–8 cents/lb to come out of it," one source said. "I don't see anything that is going to completely stop the slide before the end of the year."
Major North American PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, Total, NOVA Chemicals and Formosa.
($1 = €0.75)
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