AKRON, OHIO—Major polyethylene producers have announced 3 cent price hikes, effective Dec. 1.
Dow Chemical Co. of Midland, Mich., Mobil Chemical Co. of Edison, N.J., Westlake Polymers of Houston and Union Carbide Corp. of Danbury, Conn., each confirmed the increase attempts. Dow is the North American capacity leader in low and linear low density PE production, while Mobil and Union Carbide each rank in the top 10 in those categories. Westlake is among the top five LDPE producers.
Dow, Mobil and Union Carbide also produce high density PE.
Officials at the newly formed Lyondell Petrochemical/Millennium Chemical joint venture and at Phillips Chemical Co. declined to comment on the increases.
A Mobil spokesman said the move is based on ``very, very strong demand.''
``We know people are talking about prices weakening or slipping, but we're seeing strength across the board in natural gas, ethylene and in our customers' orders,'' the spokesman said.
He added that the increase attempt is not a function of the current railroad shipping problems in the Houston area, describing the rail situation as ``a distraction and nothing more.''
Westlake PE business manager Paul Blanda said economics in ethylene, PE's primary feedstock, have not caused recent drops in pricing.
``Ethylene, in our opinion, is not falling off at all,'' Blanda said. ``It's extremely tight and costs are very high. There are no margins in the industry anymore.''
He also predicts that additional ethylene capacity to be added by year's end at Westlake, as well as at Chevron Corp. and Exxon Chemical Co., will not have the degree of impact some are expecting.
``It doesn't take long for the market to catch up with new capacity with the size of this industry,'' Blanda said.
Len Azzaro, Dow's North America PE commercial director, said his firm is seeing very strong demand for all grades of PE.
PE prices have dropped an average of 4 cents since midsummer, with buyers citing solid supply. Industry analysts in the Houston area also expect ethylene prices to drop by as much as 1 cent this month, which would affect PE pricing even further.
The new round of increase attempts marks the fourth time this year such moves have been tried. A 3 cent increase went through between February and April, but two subsequent attempts totaling 7 cents were unsuccessful.
In a separate matter, this week's Plastics News resin pricing chart shows a correction in prices for PVC dispersion resin. The prices on the chart increased 4 cents per pound.
While PVC suspension resin prices have dropped an average of 4 cents in recent months, dispersion resin prices have remained unchanged.
The flooring industry accounts for about 37 percent of annual dispersion PVC sales. Industry sources described dispersion PVC as a mature market that has seen annual growth of 1-2 percent in recent years. Dispersion PVC accounts for 680 million pounds of the annual 13 billion-pound PVC market.