US polyethylene prices were set to decrease in June, with the only question being how much, industry sources said Monday.
ExxonMobil announced it would decrease the price for its June shipments HDPE resins by 2 cents/lb, while LDPE, LLLDPE are to be down 4 cents/lb, according to a company letter obtained by Platts.
ExxonMobil's announcement was seen as setting the stage for further negotiations, sources said, instead of the final word on contracts.
"I've heard a few companies will follow ExxonMobil," a supplier said.
Buyers, however, likely will seek a further decrease.
"This is just the beginning (of negotiations)," a buyer said.
Domestic prices have risen roughly 11 cents/lb from the beginning of 2011, and producers were trying to raise prices another 5 cents/lb in June. But with global demand slow, US PE makers are being forced to decrease prices.
"My buyers haven't bought anything in June," a distributor said.
The decrease in PE came at the same time spot ethylene prices have begun a steep decline. Spot ethylene is down 10 cents/lb ($220/mt) from a week ago to 53.75 cents/lb FD USG.
