Price hikes delayed by PE makers

After some uncertainty, major North American polyethylene makers have delayed 4-cent/lb price hike from Aug. 1 to Sept. 1 as per Plasticnews. PE market pricing for August was expected to be flat like in July, but rising export volumes and increasing operating rates led producers to make a late-month push to get the increase through. This attempt, however, was complicated by the fact that some major third-party pricing indexes already had reported pricing for the month as flat. Nova Chemicals Corp. of Pittsburgh was believed to be the first PE maker to formalize the move by announcing an additional 5-cent increase attempt for Oct. 1, adding that “dynamics clearly demonstrate a tight North American polyethylene marketplace and support the need for immediate pricing action.” Official with the firm cited a 96% regional PE operating rate for July and producer inventory levels that were 9 days lower in July 2009 than they were in July 2008. “Costs have been creeping up on us,” an executive at a rival PE maker said. “But domestic demand has been better than expected. We really thought we had a chance of getting [the August increase].” Through August, North American PE prices had climbed an average of 13 cents/lb in 2009. That works out to an increase of about 22%, based on average selling prices for dairy blow molding grades of high density PE. The increases came after prices plummeted in Q4-2008, as prices for oil and natural gas tanked and demand evaporated as the impact of global recession kicked in. U.S./Canadian HDPE demand through June was down 10% vs. the year-ago period, according to the American Chemistry Council. Sales of low density PE were down 15% and sales of linear LDPE were down 8% in the same comparison. There were, however, some unexpected growth spots in the gloomy half-year report. Regional sales of HDPE into blow molding were up almost 1% overall, with jumps of 13% in liquid food bottles and 12% in household chemical bottles. In LLDPE, sales into shrink/stretch film were up almost 2%, according to ACC.
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