Six polyethylene manufacturers separately have announced 4 cent-per-pound price increases effective June 1, on the heels of an earlier 3 cent attempt that some buyers say they still haven't seen.
The suppliers — Union Carbide Corp. of Danbury, Conn.; Millennium Chemicals Inc. of Cincinnati; Chevron Corp. of Houston; Dow Chemical Co. of Midland, Mich.; Mobil Chemical Co. of Fairfax, Va.; and Montell Polyolefins of Wilmington, Del. — announced the moves between April 16 and May 1.
The increases include all grades of high, low and linear low density PE.
Industry sources said similar increases have been announced by Houston-based Exxon Chemical Co. and Nova Chemicals Ltd. of Calgary, Alberta. Exxon officials declined to comment, while Nova officials could not be reached.
Officials at Union Carbide, Millennium, Montell and Chevron said the moves are designed to cover rising costs for feedstocks such as ethylene, ethane and propane. One Union Carbide official said the company's PE profit margins were ``down to zero'' because of raw material costs.
The increase is the third attempted by the industry this year. A 3 cent increase took effect between February and April, according to several resin buyers. A second 3 cent increase originally was set for April 1, but that attempt has met mixed results. Some resin buyers contacted have accepted the second increase, while others have fended it off.
A Pennsylvania-based LLDPE resin buyer said the staggered schedules of the first two increases caused confusion with his distributor, leading the buyer, who purchases about 5 million pounds of LLDPE a year, to believe resin producers ``aren't going to put a lot into'' the third increase.
Another industry source at a Texas manufacturer said he believes buyers ``have no intent of passing'' the 4 cent increase because of an expected lack of producer support.
Harold Holz, a Chappaqua, N.Y.-based industry consultant, said the June 1 increase may be an attempt to ensure continued support for the 3 cent hike that preceded it.
The series of increases is an indication of how the PE market has changed in recent years, according to Jeff Taylor, Chevron's manager of PE sales.
``If you would have asked me three years ago, I would have told you that [two 3 cent raises and a 4 cent raise] were pretty rare,'' Taylor said. ``But in the last three years it's not that rare at all.''