So revisions came out in the final week of March spreading out the original increase over two months instead of one.
The delayed settlement stemmed from a split in the market between those pushing for no increase and those seeking the three-cent hike, the latter group including not only PE producers but also some of their end-users.
A longtime PE watcher said a move by five or six stretch film users in late March provided support for the smaller hike.
Five stretch film producers last week separately revised their increase letters issued in early March with new letters stating what their suppliers had done.
“That made a difference,” the source said.
The gain in March defied expectations of a drop in PE prices because of new capacity that has come online in the past year in Mexico and Canada, plus four new US units totaling 3.5m tonnes slated to come online this year.
Nevertheless, PE contracts rose 8 cents/lb during the first quarter this year and have increased by 13 cents/lb in the past 12 months.
Industry data shows that US and Canada PE production declined by 7% in February year on year, which sources attributed to scheduled plant maintenance, and the tight supply apparently paid off for producers. Not counting exports, sales increased 2.9% in February, according to industry data.
However, critics noted that PE sales declined from January, by 4.6% according to the data.
Major producers include Chevron Phillips Chemical, Dow Chemical, ExxonMobil, Formosa Plastics, LyondellBasell, NOVA Chemicals, Total and Westlake.