02 August 2012 18:51 [Source: ICIS news]
HOUSTON (ICIS)--Strong demand in both US and export markets will give proposed price increases in the US polyethylene (PE) market a good chance of success, the CEO of Westlake Chemical said on Thursday.
Most US producers have announced increases of 5 cents/lb ($110/tonne, €90/tonne) for 1 August for all grades of PE. At least two other producers announced an additional 5 cent/lb increase for 1 September.
Speaking during a second-quarter conference call, CEO Albert Chao said as oil prices have increased following earlier lows, sentiment in the global PE market has improved, which has strengthened demand.
"We believe there is a strong possibility of the increases being implemented," Chao said.
Many market participants have attributed the strong June and July PE demand to restocking when prices were at their lowest point. Demand is expected to weaken once prices are increased, sources have said.
However, Chao said he expects the restocking to continue, adding that present inventory levels at the consumer level are still at the "low range of normal levels."
Additionally, with the competitive cost position in the US olefins market, Chao said US producers are in a good position to supply the export market.
($1 = €0.82)
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