US PE Jan contracts roll, increase expected in Feb

One distributor says the chances of the market accepting a price hike next month are “a slam dunk”, using a basketball term for “a certainty”. The La Porte Complex near Houston produces linear low-density polyethylene and low-density polyethylene, among many others. (Source: LyondellBasell)

HOUSTON (ICIS)–US January polyethylene (PE) contracts rolled over from December, but a healthy increase is expected in February, sources said on Thursday.

January rolled because nearly every producer has moved separately to increase contracts by 5 cents/lb in February. One producer has issued a nomination for a 6 cent/lb hike in March.

Buying has increased in recent weeks to avoid the hike in February. A trader said the PE market has been lively, with supplies of high-density (HDPE) and low-density (LDPE) tightening.

A distributor said the chances for the February hike being accepted by the market were excellent – “a slam dunk”, as the distributor called it, using a basketball term for a certainty.

A trader said the PE market has been lively in the past week or so, with supplies of high-density (HDPE) and low-density (LDPE) tightening.

The no-change in January marks the sixth rollover in the past 12 months. PE contracts rolled in May through August last year and also in October.

Higher prices expected in February stem from rising global PE prices, along with higher feedstock ethylene in most regions, and upcoming turnarounds.

Major producers include Chevron Phillips, Dow, DuPont, ExxonMobil, Formosa Plastics USA, Ineos Olefins and Polymers, LyondellBasell, Total USA and Westlake Petrochemicals.