02 January 2013 21:37 [Source: ICIS news]
HOUSTON (ICIS)--US December contract prices for polyethylene (PE) were settled flat with November levels, based on increased export demand that helped producers clear out extra inventory during the month, sources said on Wednesday.
Buyers had been expecting a slight price drop during the month on the assumption that weak domestic demand would cause producers to lower prices to help clear out growing inventories.
However, by the end of December, producers said they were able to sell significant amounts of material into the export market with almost every region interested in US resin.
"We don't have our final numbers for December yet, but it is either going to be the No 1 or the No 2 sales month for the year for us," one producer said. "We had a lot of export demand for product out of North America."
With December settled, attention has now turned to January, with producers pushing for a 5 cent/lb increase for the month.
Suppliers say momentum is growing for the increase, particularly with rising spot ethylene costs, caused by recent unplanned cracker outages.
However, buyers say January prices will depend on whether producers can continue to sell at high volumes into the export market.
"I don't see anything pushing it up," said one buyer, who said the market appears fairly balanced at the moment.
In addition to the January price increase nomination, at least three producers have announced a 4 cent/lb increase for February, sources said.
Those proposed increases are believed to be an effort to support the January price hike, buyers said.
With the rollover, prices for LLDPE butene film were at 65-68 cents/lb DEL (delivered), LDPE film prices were at 74-77 cents/lb DEL and HDPE blow moulding prices were at 63-66 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, Total, Nova Chemicals and Formosa.
($1 = €0.76)
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