Even as price hikes for polyethylene resins slated for May 1 were going into effect, Dow Chemical Co. said May 28 it plans to increase PE prices by another 5 cents a pound July 1. The announcement marks Dow's third 5 cent-per-pound PE increase this year. It applies to all PE products made by the Midland, Mich., firm.
As of May 30, it could not be confirmed whether any other PE producers had announced similar increases.
With the May 1 increase, prices for linear low and low density PE have risen by 10 cents per pound since April 1, while prices for high density PE rose by about 6 cents a pound.
A separate, 4 cent-per-pound price increase is pending for HDPE for June 1.
Dow was the first to announce a PE price increase in December, when prices were continuing to slide downward. But Dow pushed through that increase on April 1.
Demand for PE continued to be strong through May, four executives at resin-producing companies said last week.
Preliminary industry data indicates PE sales for the first four months of this year were 12 percent higher than sales in the same period a year ago, they said.
Executives at Dow, Union Carbide Corp. and Chevron Corp. said their companies have been operating under sales-control programs for PE because of the strong demand. Dow put its sales controls into place April 1.
Executives said they have seen extreme tightness - if not shortages - of specific LLDPE and HDPE grades in recent weeks.
While two resin company executives said they believed the LLDPE tightness has arisen from difficulties in scheduling the correct production mixes at reactors, three processors reported last week they have had trouble getting injection molding grades of HDPE.
Separately, demand for polypropylene also continued to grow at 10-12 percent compared to last year, and producers said last week their latest price increase - due to be implemented on May 1 - is going into effect.
While one executive said he saw the PP price increase ``sailing'' through the market, three other executives at PP suppliers said last week their price increases appeared to be more fragile.
``There is not undue resistance, and there has not been the competitive sniping that we sometimes see that might undermine it,'' one executive said.
``The market remains extremely tight, and there have been recent problems in meeting demand, so I think the increase will go through, although it may take several more weeks to accomplish that,'' said another.
A slight downturn in demand in late April and early May, which caused off-grade markets to swell slightly, quickly disappeared, two executives said, taking with it thoughts that the May price increase would fail.
Five polyethylene film processors and bag converters noted last week they saw higher prices for resins and film products, and were passing them on to their customers.
Production of ethylene and propylene monomer also continued at high levels, and monomer prices continued to inch upward, providing polymer makers additional reasons for pushing their increases through.
The continued strong demand for ethylene, pushed by increased sales from a number of derivative products, led Amoco Chemical Co. and Lyondell Petrochemical Co. to delay scheduled maintenance for their ethylene crackers until later this year.