INEOS announces 3 cent/lb September price hike for PE

HOUSTON (ICIS)–US polyethylene (PE) producer INEOS Olefins & Polymers announced on Tuesday it will implement a 3 cent/lb ($66/tonne) price hike for all grades of high density polyethylene (HDPE) effective on 1 September, according to a copy of a customer letter obtained by ICIS.

The proposed increase will take the place of a 6 cent/lb price increase originally announced for April that was never implemented, according to the letter. April prices settled flat in the US PE market.

The letter offers no reason for the proposed increases. It also does not make reference to August pricing.

The HDPE sector has been tight for much of July following a string of production problems, both in the upstream ethylene market and in the PE market. Sources said HDPE blow moulding has been the tightest grade.

The supply situation was appearing to improve, as US PE producer LyondellBasell announced on Tuesday it would lift its force majeure on HDPE out of its plants in Matagorda and Victoria, Texas, effective on 1 August. The force majeure was announced on 9 July, based on significant feedstock supply disruptions.

The production problems during July ended any discussions about potential price drops in the PE market, which has not seen a price drop since November 2012. In fact, many buyers had been anticipating a price increase announcement for August or September, based on the tight supply.

So far, no other price increase announcements have been heard.

June prices for LLDPE butane film were at 83-85 cents/lb DEL (delivered), LDPE film prices were at 92-94 cents/lb DEL and HDPE blow moulding prices were at 83-85 cents/lb DEL, for small volume buyers, as assessed by ICIS.

July prices are expected to settle flat this week, sources have said.