01 February 2012 21:28 [Source: ICIS news]
HOUSTON (ICIS)--US January contract prices for polyethylene (PE) settled flat for most of the market, as producers agreed to meet competitive offers at the end of the month, sources said on Wednesday.
Producers had been pushing for a 6 cent/lb ($132/tonne, €101/tonne) increase for the month, saying inventories remained low and forthcoming cracker turnarounds had forced some suppliers to buy higher-priced spot ethylene, boosting their costs.
But buyers said the increase was not justified, particularly after producers were successful in implementing a 5 cent/lb increase in December that surprised the market.
Buyers pointed to weak demand and producers' margins, which have increased with lower-priced ethane, to explain why the price settled flat for January.
"I just don't think the justification was there," said one buyer. "There just wasn't enough support out there to justify pushing through another increase after they had just gotten one."
However, producers said the flat settlement was more of a domino effect of having to meet competitive offers, after one major producer settled flat.
"It was in play," said one producer of the 6 cent/lb increase. "But there were just too many competitives."
The flat settlement means producers will try to seek the 6 cent/lb price hike in February, sources said.
With the flat settlement, 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 = €0.76)
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