31 October 2012 22:27 [Source: ICIS news]
HOUSTON (ICIS)--US polyethylene (PE) contracts ended October with a flat settlement, after most producers agreed to push a proposed 5 cent/lb ($110/tonne, €85/tonne) increase from October to November, sources said on Wednesday.
One producer last week had agreed to push its proposed 5 cent/lb October increase to November. However, most other producers did not follow that move until Tuesday or Wednesday, sources said.
Buyers have said all month that demand was not strong enough to support an increase. However, one producer disagreed, saying that its order volumes for October are outpacing the company's ability to supply resin.
"This was strictly based on competitive activity," the producer said of the flat settlement. "We still see our demand as good."
Producers said they will focus on pushing through the increase in November.
However, buyers and some other market participants said disruptions at the converter level caused by Hurricane Sandy could make it difficult for producers to push through any increase.
One producer agreed that the hurricane could impact demand in November, adding that between 20-30% of all PE converting takes place in the Atlantic region.
"It's a very large region for converters," the supplier said. "Not all of them are out, and not all of them have huge issues, but some of our customers have power outages and as a result they are not running and they are not buying resin."
Sources said it will take at least a week or two before it is known what impact the hurricane will have on industry-wide demand.
With the October settlement, current prices for linear low density polyethylene (LLDPE) butene film were at 67-70 cents/lb DEL (delivered), low density polyethylene (LDPE) film prices were at 76-79 cents/lb DEL and high density polyethylene (HDPE) blow moulding prices were at 65-68 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, Total Petrochemicals and Formosa Plastics.
($1 = €0.77)
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