US September PE up by 3 cents/lb on tight supply from outages

HOUSTON (ICIS)–US September polyethylene (PE) prices were assessed 3 cents/lb ($66/tonne) higher by ICIS on Friday based on increases agreed to by most market participants.

The price increase proposals drew strength from tight supply caused by outages upstream in the ethylene market as well as in the PE sector.

With the increase, prices for linear low density PE (LLDPE) butene film were at 86-88 cents/lb DEL (delivered), low density PE (LDPE) film prices were at 95-97 cents/lb DEL and high density PE (HDPE) blow moulding prices were at 86-88 cents/lb DEL, for small volume buyers, as assessed by ICIS.

One producer has announced a 4 cent/lb increase for mid-October. A trader said most-mid-month increases over the years have not been successful.

“But I wouldn’t be surprised if there aren’t some 1 November increase announcements that come out,” the trader said. “Supply is not improving.”

Another buyer disagreed, saying a late-year hike seemed remote.

“For there to be another increase in the fourth quarter, they would have to have lots of problems with the turnarounds,” the buyer said.

Regarding feedstock ethylene, there are three ongoing cracker shutdowns, representing 10% of the market, with another one set to come down in October that represents an additional 2.5%.

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