Price and market trends: Dow announces US polyethylene price increase for May

12 April 2013 09:55  [Source: ICB]

US polyethylene (PE) producer Dow Chemical announced it will implement a 4 cent/lb ($88/tonne, €69/tonne) increase on all grades of PE, effective on 1 May, sources said on 3 April.

The price increase nomination is in addition to a 4 cent/lb increase the company previously announced for April, according to a copy of a customer letter obtained by ICIS.

The announcement, dated 1 April, gives no reason for an increase.

However, Dow has begun a turnaround at its Freeport cracker in Texas. The turnaround at the 1.655m tonne/year unit is expected to last for 60 days, sources said.

US HDPE

While the Dow turnaround and other planned cracker turnarounds are expected to tighten supply somewhat this month, sources said they do not believe there is enough justification for an additional price increase.

Many buyers and some producers said they were sceptical that the proposed April increases will be implemented, particularly after PE prices rose by only 4 cents/lb for all grades in February and March.

"My impression is that most suppliers are not real confident the April 4 cent/lb increase will happen in April, if at all," said one buyer.

"I don't think [Dow] will get support on this one from other manufacturers unless something additional happens in ethylene production."

Globally, PE prices have been falling recently, which is limiting US producers' ability to sell into the export market.

Sources said that is another factor that may keep prices from rising in the coming months.


By: Michelle Klump
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