Even as commodity resin prices continued to skid, Dow Chemical Co. announced Dec. 1 it will try to raise polyethylene prices. Prices for high, low and linear low density PE resins dropped on average 1 cent per pound Dec. 1, following the downward spiraling price of ethylene.
Meanwhile, polypropylene and polystyrene prices continued to slip, declining 1-2 cents per pound at the end of November and the first week of December.
Dow, one of the largest producers of ethylene and PE, said it will raise PE prices across the board 5 cents per pound Jan. 1.
Dow's move was seconded by Rexene Corp., which announced Dec. 11 a similar, 5 cent-per-pound increase for LDPE. Rexene of Dallas said its increasealso will take effect Jan. 1.
Interviews last week with more than 15 PE buyers and suppliers revealed most see the moves as efforts to staunch PE producers' declining profit margins. Indeed, a Dow executive acknowledged the apparent futility of the announcement, but said in an interview he believes the Midland, Mich., company had to take such a step as an act of leadership in the industry.
Ethylene prices dropped to 211/2 cents per pound this month, their lowest since April 1994.
Meanwhile, prices for propylene monomer fell to 18.75 cents per pound, the lowest since October 1994, and prices for styrene monomer dropped to 34 cents per pound, the lowest since September 1994.
In light of the lower monomer prices, prices for most PP and PS grades fell slightly.
Demand for these three volume thermoplastics - PE, PP and PS - was soft through the end of November and early December, industry executives said in interviews last week. Officials of polymer-producing companies said they saw fewer orders, while executives of processing companies said they were feeling the effects of low consumer spending. This lower spending translated into soft orders for finished and semifinished goods.
Processing company executives said they expect demand for their goods to be soft wellinto the first quarter of 1996, so price increases for polymers may be difficult to pass along.