06 January 2012 20:01 [Source: ICIS news]
HOUSTON (ICIS)--US December contract prices for polyethylene (PE) rose by 5 cents/lb ($110/tonne, €86/tonne) for most of the market, based on low inventory levels and some supply tightness, sources said on Friday.
Apart from a few large buyers who were given price protection until January, most of the market saw the full increase — the first the PE market has seen since April, despite repeated attempts to push through a 5 cent/lb increase since May.
Buyers were stunned by the measure's success, saying it is very unusual for an increase to take hold in December.
"I'm a little shocked that it went through in December," said one buyer. "I can't remember if there has ever been an increase at the end of the year."
Some buyers continued to try to resist the price hike, saying they didn't believe there was enough demand to warrant it.
But producers said there was no room left for discussion, saying their books are closed and prices are up by 5 cents/lb across the board.
"I think it really came down to resolve, and the producers saying we will get back the margin erosion over the last several months," said one producer.
With the increase, prices for linear low density polyethylene (LLDPE) butene 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.
Major US PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, NOVA Chemicals and Formosa.
($1 = €0.78)
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