HOUSTON (ICIS)--Dow Chemical told US polyethylene (PE) customers on Thursday that its 3 cent/lb ($66/tonne) increase for May is being delayed until June, according to a letter sent by the company.
Marking the third consecutive delay of the hike, the 18 May letter did not give a reason for the move.
Buyers and other PE watchers say there is little defense for such a hike, with global PE contracts falling and US export prices slipping in the past month.
Another reason undercutting the proposed hike came earlier this month when industry data showed PE inventory jumped to a near-two-year high in April.
“There’s nothing there really to support it,” a longtime PE watcher said of the proposed hike.
The proposed increase originally was part of a larger hike in March and has been pushed back in each month since.
Sources said other producers separately announced similar increases for May and most likely will also delay until June.
A popular opinion in the market now is for May contract prices to roll over and to drop in June, unless there is a sign that the high inventory is being reduced.
PE contracts rolled over in January, rose by 5 cents/lb in February and rose by 3 cents/lb in March. Prices rolled over in April.
Major US PE producers include Chevron Phillips Chemical, Dow Chemical, ExxonMobil, Formosa Plastics, LyondellBasell, NOVA Chemicals, Total and Westlake.
Photo credit: MICK TSIKAS/EPA/REX-Shutterstock