Major polyethylene makers have issued a second price increase attempt while still negotiating to pass an earlier jump on to some buyers.
The second pricing wave comes in the form of a 5 cent-per-pound increase scheduled for March 1. Mobil Chemical Co. of Fairfax, Va.; Equistar Chemicals of Houston; Dow Chemical Co. of Midland, Mich.; and Union Carbide Corp. of Danbury, Conn.; have each announced a March increase, according to industry sources.
The move comes as PE buyers and processors are reporting a 1 cent-per-pound price drop in December for all grades of high density, low density and linear low density PE. This decline, the 12th consecutive month-on-month drop, is reflected in this week's Plastics News resin pricing chart.
Meanwhile, haggling continues on price increases ranging from 3-5 cents that were set to take hold Jan. 1. Officials at two HDPE producers said increased prices on the spot ethylene market and lower ethylene inventories were pushing the increase through.
Another industry source said PE and ethylene supplies were getting snug because of planned outages for maintenance and debottleneckings and unplanned outages from storm damage at many PE plants in the Houston/Gulf Coast area.
These outages — along with declining processor inventory — give the Jan. 1 move a chance to take hold.
``There wasn't a lot of pre-buying before [the Jan. 1] attempt as there was on some of the other attempts,'' the source said. A major HDPE/LDPE buyer based in Ohio is more skeptical of the move, since many PE makers also produce their own ethylene.
``The bottom line is [PE producers] are going to have to start shutting down reactors,'' the buyer said. ``Every one of them would have to take 10 percent out of capacity to get any movement on pricing.''
The buyer added Equistar Chemicals' recent decision to close a HDPE line in Port Arthur, Texas, would tighten supply somewhat, but not enough to have a direct impact on PE prices.
Through November, North American HDPE sales and captive use were up 3.7 percent, according to the Society of the Plastics Industry Inc. in Washington. LLDPE sales were up 2.5 percent, while LDPE sales had dropped 1.9 percent.