HOUSTON --Less polyethylene (PE) was available through secondary channels at the end of May as producers either slowed their plants or held on to product in anticipation of June price increases, US buyers said on Wednesday.
US producers have proposed a 5 cent/lb ($110/tonne) price increase for 1 June, and at least one supplier, Dow Chemical, has announced an additional 7 cent/lb increase for 1 July, buyers said.
They ve done a good job of throttling back reactors, only producing what they can sell, said one buyer. A few deals are starting to pop up, but only at the end of the month.
The source mentioned seeing some decently priced offers for high density polyethylene (HDPE) for blow moulding. Another buyer said HDPE blow moulding appeared to be relatively soft compared with other PE grades.
Buyers said directly sourced prime material was readily available across all PE grades, and US producers continued to lean heavily on export channels to keep domestic PE supplies in balance.
However, US production rates could decline if domestic PE units back-integrated to heavy feedstock are shut down by tightened margins.
A major PE buyer said Equistar had the most exposure to heavy feedstock among PE producers. The company has indicated it would shut down PE assets if they begin operating at a financial loss, the source said.
European PE producers face similar margin pressures, as signified by Dow s moves to curb HDPE production and even temporarily idle a low density polyethylene (LDPE) plant. The company has also announced a non-negotiable PE price hike of euro 150/tonne for June, sources said.
US producers have proposed a 5 cent/lb ($110/tonne) price increase for 1 June, and at least one supplier, Dow Chemical, has announced an additional 7 cent/lb increase for 1 July, buyers said.
They ve done a good job of throttling back reactors, only producing what they can sell, said one buyer. A few deals are starting to pop up, but only at the end of the month.
The source mentioned seeing some decently priced offers for high density polyethylene (HDPE) for blow moulding. Another buyer said HDPE blow moulding appeared to be relatively soft compared with other PE grades.
Buyers said directly sourced prime material was readily available across all PE grades, and US producers continued to lean heavily on export channels to keep domestic PE supplies in balance.
However, US production rates could decline if domestic PE units back-integrated to heavy feedstock are shut down by tightened margins.
A major PE buyer said Equistar had the most exposure to heavy feedstock among PE producers. The company has indicated it would shut down PE assets if they begin operating at a financial loss, the source said.
European PE producers face similar margin pressures, as signified by Dow s moves to curb HDPE production and even temporarily idle a low density polyethylene (LDPE) plant. The company has also announced a non-negotiable PE price hike of euro 150/tonne for June, sources said.
