Polyethylene prices took a quick tumble and polystyrene producers canceled a price increase last week in the face of continued soft demand for the polymers. Widespread interviews with buyers and sellers revealed that prices for high, low and linear low density polyethylene dropped 1-2 cents per pound, depending on the grade, as producers scrambled to retain or gain market share.
The scramble came a week after producers rescinded an announced price increase.
In the 90 days that the increase was on the table, PE producers and buyers alike said they believed that it would lend support to a previous hike levied earlier this year.
However, softness in the market put that increase in jeopardy, and last week PE suppliers were telling their customers that prices would decline.
In the meantime, PS producers took a 2 cent-per-pound increase off the table, in an apparent move to acknowledge softness that PE suppliers saw a week earlier.
Many producers announced in May they planned to raise PS prices 4 cents per pound, but then changed their increases to coincide with Dallas-based Fina Oil & Chemical Co.'s announcement that it would boost PS prices by only half that amount.
Fina last week also led PS makers in rescinding the planned increase.
Earlier this year, PS makers successfully implemented a separate, 4 cent-per-pound increase.
In both PE and PS, producers have seen demand fall off slightly as a result of the weakening economy.
Orders for PE also slid earlier this year because of the economic crisis in Mexico.
Producers have attempted to buttress orders in North America by exporting polymers; however, the export pipeline now appears to be filled.
Meanwhile, a 2 cent-per-pound polypropylene increase remained pending last week for July 1.
Many PP makers announced a 3 cent increase that they wanted to become effective in June, but Amoco Chemical Co. of Alpharetta, Ga., announced a 2 cent increase for July 1, and other producers changed their announce-ments to match Amoco's.
