21 November 2011 20:31 [Source: ICIS news]
HOUSTON (ICIS)--US producer LyondellBasell announced a 7 cent/lb ($154/tonne, €114/tonne) price increase for all grades of polyethylene (PE) effective on 1 January 2012, according to a letter sent to customers on Monday.
The proposed increase is in addition to a 5 cent/lb increase nominated for November and a 6 cent/lb increase nominated for December, according to the letter.
The letter also states the company will be implementing "order control" starting on 1 December for all PE products, limiting sales to contractual levels.
"Order requests exceeding contractual levels will require prior approval from Equistar Chemicals, LP," the letter states.
The letter provides no reason for the increase, but producers have said they need to improve margins.
The order control could be an attempt by LyondellBasell to keep inventory levels low going into the end of the year, said one market participant.
It is also likely an attempt to bolster existing price increase announcements, sources said.
A spokesman for LyondellBasell could not immediately be reached for comment.
November PE contract discussions continue, with most buyers saying they believe weak domestic demand will hold prices flat.
US PE prices for October were at 66–69 cents/lb DEL (delivered) for linear low-density PE (LLDPE), 75–77 cents/lb DEL for low-density PE (LDPE) and 64–66 cents/lb for high-density PE (HDPE) blow moulding 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 = €0.74)
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