Confusion among resin buyers and unsteady prior increases have led some major polyethylene manufacturers to delay 4 cent increases previously announced for June 1. But industry leader Millennium Petrochemicals Inc. was sticking with its plans to push the 4 cent hike.
Dow Chemical Co. of Midland, Mich., informed customers June 2 of a temporary voluntary allowance that will push the 4 cent increase back to Aug. 1.
Officials at Mobil Chemical Co. of Edison, N.J., and Chevron Corp. of Houston said they would follow the same procedure, but would not make formal announcements to customers.
Those three companies — along with Union Carbide Corp. of Danbury, Conn.; Millennium of Cincinnati; and Montell Polyolefins of Wilmington, Del. — had announced the June 1 increase between April 16 and May 1.
Officials at Nova Corp. of Calgary, Alberta, said they were considering a similar delay, but had not made a decision. Union Carbide and Montell officials could not be reached for comment.
Millennium was a notable holdout among manufacturers contacted last week. A company spokesperson said Millennium planned on going through with the increase as planned.
The increase would affect all grades of high density polyethylene, low density PE and linear LDPE.
Most PE makers had announced 3 cent increases for April 1, but that increase did not go through to all customers. Earlier 3 cent increases had gone into effect between February and April.
The slow progress of the second 3 cent increase played a role in Dow's decision to delay the 4 cent hike, according to Len Azzaro, Dow's commercial director for PE.
``With the two increases on top of each other, it was very difficult for buyers to move the price on to their customers,'' Azzaro said. ``The temporary voluntary allowance will give them a chance to implement what's already out there.''
Joe Locke, Chevron's sales manager for film, coating and pipe resins, said the staggered increase dates were causing quite a bit of confusion. Buyers have had to sort out different announced, effective and implemented dates for three separate price increases so far this year.
Locke said the staggered dates, which he claimed would offer no advantage to one manufacturer over another, were unprecedented in his 20 years in the industry.
``Buyers are used to much more consistency,'' Locke said.
Resin processors contacted last week were more skeptical towards full implementation of the second round of 3 cent increases. Some were not even taking the 4 cent increase into consideration.
An Ohio-based processor who uses 250 million pounds of HDPE each year said the second 3 cent increase ``has gone completely into never-never land,'' because of a lack of buyer support.