Market factors related to Hurricane Katrina have led Equistar Chemicals LP of Houston and Nova Chemicals Corp. of Pittsburgh to announce new price increases on their polyethylene resins.
Both firms are seeking 5 cent PE hikes Oct. 1. Most major PE makers already had a total of 19 cents in increases nominated for July, August and September.
``As we are all painfully aware, the energy markets escalated throughout the summer, and the effects of Hurricane Katrina have further exacerbated that situation,'' Vaughn Deasy, Equistar polymer sales vice president, said in a Sept. 2 letter to customers. Natural gas and crude-oil-related feedstocks are trading at unprecedented levels and may continue to rise, he said.
The feedstocks are being purchased daily to make ethylene and polyethylene, and there are no delays available to Equistar to postpone the higher costs, Deasy added.
Industry sources said Dow Chemical Co. of Midland, Mich., and Huntsman Chemical Corp. of Salt Lake City had announced similar 5 cent moves for Oct. 1, but officials with the firms could not be reached for comment. As of Sept. 6, it was unclear if PE makers ExxonMobil Chemical Co. and Chevron Phillips Chemical Co. LLC were following suit.
In a separate letter to customers, Equistar parent Lyondell Chemical Co. outlined possible logistical delays caused by the hurricane. Customer fulfillment director Tom Walsh said rail traffic originating at the Gulf Coast and heading east may be delayed up to five days, and truck traffic going to or through Louisiana, Mississippi, Alabama, Georgia and Florida may be delayed a day or more.
Truck availability also may be constrained as customers attempt to switch from rail to truck deliveries, Walsh said, and barge operations on the Mississippi and Ohio rivers, as well as on intercoastal routes, may be delayed three or more days.