10 May 2013 09:40 [Source: ICB]
US April contract negotiations for polyethylene (PE) ended with a flat settlement after producers postponed a proposed 4 cent/lb ($88/tonne, €67/tonne) price increase until May, sources said on 2 May.
While a few producers had agreed earlier in the month to postpone the increase, others waited until the week ending 5 May to meet the competitive offer, sources said.
CRACKERS STILL DOWN
Some buyers had been pushing for a price reduction for the month. However, with a few ethylene crackers still down, producers were able maintain price levels, sources said.
Buyers said they expect that to change in May, with many buyers saying they expect prices to start dropping this month and continue to drop further in June.
"It is going to go down, but the question is how much," said one buyer, who said it planned to argue for a minimum reduction of 4 cents/lb.
WEAK DOMESTIC DEMAND
The buyer pointed to weak domestic demand and already low prices in the broker market as signs that prices will move lower.
Following the April settlement, prices for linear low density PE (LLDPE) butene film were at 74-76 cents/lb DEL (delivered), low density PE (LDPE) film prices were at 83-85 cents/lb DEL and high density PE (HDPE) blow moulding prices were at 72-74 cents/lb DEL, for small volume buyers, as assessed by ICIS.
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