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Tighter resin prices leading to price hike for PE film

By: Jim Johnson

August 29, 2014

One of North America’s largest film makers is pushing through a polyethylene price increase due, in part, to the tight resin market.

AEP Industries Inc.’s Stretch Film Division has alerted customers that prices will increase by 6 percent for all grades of stretch film effective with all orders starting Sept. 22.

Plastics News previously reported that unplanned downtime at several plants, including sites operated by Dow Chemical Co., LyondellBasell Industries and Chevron Phillips Chemical Co., was creating tight demand and higher prices for PE resin.

Now, users of the resin are feeling the need to pass along those price increases, including AEP, which ranks No. 7 on Plastics News list of the largest film and sheet makers.

Sigma Plastics Group and Berry Plastics Corp., two other heavy hitters in the film and sheet business, previously indicated efforts to push through a price increase as well, while they and AEP have also been pushing for price increases due to non-resin related costs since late spring.

AEP, in its letter to customers, indicated the latest increase is “due to unplanned outages, increasing energy and feedstock costs, and improved global demand.”

The company, in advance of the upcoming increase, will limit orders in September “to a quantity equal to one month of their average historical six months purchases,” AEP said in the letter.