Prices for linear low density polyethylene have dropped an average of 1 cent per pound since December, and pressure is mounting for a similar drop in low and high density PE as well, according to several buyers contacted recently.
The LLDPE drop, reflected on this week's Plastics News resin pricing chart, was prompted by a market that was ``fairly soft, demandwise,'' according to one Chicago-based buyer.
The buyer added he expected LDPE to see the same drop soon, with HDPE also dropping by the end of January. Some buyers reported they already had seen such reductions, but their numbers weren't large enough to move Plastics News' prices.
A New Jersey-based buyer said a seasonal business slowdown played a role in the LLDPE drop. Some resin makers unsuccessfully attempted to stop the slide by citing problems with rail delivery, the buyer said.
PE prices continue to be affected by healthy ethylene supplies filled by new crackers from Exxon Chemical Co., Chevron Corp. and Westlake Polymers.
Consultant Donna Todd of Houston's Phillip Townsend Associates Inc. confirmed PE prices are ``very slowly eroding,'' but not at the sharp rate they were dropping in recent months.
Todd pointed out PE demand has followed its traditional cycle of being soft in December, while decreasing ethylene prices — which fell another three-quarters of a cent in December — effectively have neutralized the 3 cent price increases previously announced by major suppliers.
``The attempt failed miserably,'' one buyer said. ``It came in a period when people are expecting a stall in prices or a potential decline.''
The increases originally were set to be effective Dec. 1, meaning most large buyers would have seen the new prices in early January.
Industry sources said many large PE makers informally slid that effective date to Jan. 1 because of buyer resistance.
Several major PE suppliers did not return calls for comment last week.