Multiple market sources said Thursday that US high density polyethylene contract prices are expected to rise by 2 cents/lb for June, while low density polyethylene and linear low density polyethylene contract prices are likely to remain flat.
Producers entered the month seeking 4-cent/lb increases for all grades of polyethylene after unsuccessfully attempting to implement the same hike in April and May, when contracts rolled over.
In recent days, market players have cited lower producer inventories and ongoing production issues impacting the price and availability of feedstock ethylene as factors that were strengthening the case for higher HDPE contracts.
Ineos Olefins and Polymers USA revised its June contract increase for HDPE grades, splitting the original 4-cent/lb rise over June and July, with 2-cent/lb hikes in each month, according to a letter to customers late Wednesday that was obtained by Platts. Sources said other producers were heard settling June contracts up 2 cents/lb for HDPE grades.
Following May settlements, US domestic PE contracts were assessed at 72-73 cents/lb ($1,587-1,609/mt) for HDPE blowmolding and 72-73 cents/lb ($1,587-1,609/mt) for HDPE injection. HDPE film contracts were assessed at 75-76 cents/lb ($1,653-1,675/mt).
A 2-cent increase would raise HDPE contract assessments for blowmolding to 74-75 cents/lb ($1,631-1,653/mt), injection to 74-75 cents/lb ($1,631-1,653/mt) and film to 77-78 cents/lb ($1,698-1,720/mt).
An increase for HDPE contracts would be the first since February settlements, and would bring those contract prices up 11 cents since the beginning of 2013.
LDPE contracts were assessed at 83-84 cents/lb ($1,830-1,852/mt) and LLDPE domestic contracts were assessed at 70-71 cents/lb ($1,543-1,565/mt) following May contract settlements, and would remain at that level with a June rollover.
LDPE and LLDPE contracts rose 9 cents during the first quarter of the year, but have been flat since April. Buyers made a strong push to decrease LDPE and LLDPE contract prices by 2 cents/lb in May, citing lower feedstock costs and product availability. After an initial effort to decrease prices for those grades in early June, market sources said buyers began targeting a rollover.
