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Nova latest producer to split US PE increase between March, April: letter

https://www.chemnet.com   Mar 27,2017 Platts
Nova Chemical on Friday revised its proposed US polyethylene price increase, informing customers it now intends to raise prices by 3 cents/lb in both March and April, the company said in a letter obtained by S&P Global Platts.

The split increase replaces a previously announced 6-cent March hike, and comes on the heels of a similar announcement by ExxonMobil Chemical earlier in the day.

The increases from both companies apply to all grades of polyethylene, according to letters to customers.

Neither letter provided a reason for the change in the schedule of the increase, but market sentiment has been mixed on the likelihood of US producers successfully raising prices by the full 6 cents/lb in March, particularly on the heels of a 5-cent increase in February.

Multiple sources indicated over the past week that the prospects for a full, or even partial, increase had appeared to pick up some momentum. A 3-cent hike for March could have a better chance of being implemented, sources said.

Market sources said they expected other producers to eventually follow suit.

Producer sources have pointed to strong domestic demand and three straight months of declining PE stocks as factors supporting a higher price. Spot availability has been limited for both domestic and export buyers throughout March, sources have said.

Market participants suggesting a rollover was warranted have cited multiple factors against an increase, including declines in global pricing and a dip in feedstock ethylene pricing at the start of the week.

March domestic contract prices were last assessed Wednesday at 61-62 cents/lb ($1,345-$1,367/mt) delivered rail car basis for blowmolding PE, 61-62 cents/lb ($1,345-$1,367/mt) for injection PE, and 64-65 cents/lb ($1,411-$1,433/mt) for HMW film.

Linear low-density butene polyethylene contract prices were assessed at 59-60 cents/lb ($1,301-$1,323/mt) for delivered rail cars, and low-density polyethylene contract prices were assessed at 71-72 cents/lb ($1,565-$1,587/mt) for delivered rail cars.
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