US March PE contracts settle at a rollover on balanced market

28 March 2014 18:16  [Source: ICIS news]

US March PE contracts settle at a rollover on balanced marketHOUSTON (ICIS)--March contracts in the US polyethylene (PE) market were assessed as flat on Friday, with no price increase nominations on the table and supply and demand in better balance.

With the rollover, prices for linear low density PE (LLDPE) butane film were at 83-85 cents/lb ($1,830-1,874/tonne) DEL (delivered).

Low density PE (LDPE) film prices were at 92-94 cents/lb DEL and high density PE (HDPE) blow moulding prices were at 83-85 cents/lb DEL, for small volume buyers, as assessed by ICIS.

The flat pricing follows a February price increase of 4 cents/lb, based on tight supply caused by logistics and production problems resulting, in part, from a spate of severe winter weather that hit much of the US in January and February.

That February price increase brought HDPE prices up a total of 20 cents/lb and LDPE and LLDPE prices up a total of 18 cents/lb since November 2012, the last time the market saw a price decrease.

The dynamics in March changed, with supply improving. Also, Dow Chemicals, the only PE producer to announce a March price increase, pushed that increase to April.

Now, however, buyers say they believe the time is ripe for a price reduction, saying US prices are much higher than the international market. Many sources said they do not expect a decrease in April, but may see one by May.

One buyer, who said it does not see the likelihood of a price decrease in April, pointed to spot prices, which it said have been holding steady.

“If we started seeing some push down, that would tell us that there is a likelihood of a price reduction in the contract for April, but I’m not seeing that yet,” the buyer said.

Major North American PE producers include Chevron Phillips Chemical, LyondellBasell, Dow Chemical, ExxonMobil, Westlake, INEOS, Total, NOVA Chemicals and Formosa Plastics.

By: Michelle Klump
+1 713 525 2653

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