October Price Increase.

LLDPE: Stretch Wrap Demand Improves On Industrial Production Jump
C.D.I. September resin up 4 cents/lb. Film price increases loom.Distributor restocking 'takes off' on swelling order books and depleted inventories.

A PE market analyst commented that the September PE price hike seemed to come out of nowhere. "The drivers that would have helped it get through are already gone,". "There's little domestic demand and almost no buying in Asia. But [PE makers] stuck to their guns and said "Go buy from someone else, then." North American PE prices now have climbed an average of 17 cents per pound in 2009. That works out to an increase of almost 30 percent, based on average selling prices for dairy blow molding grades of high density PE. The increases came after prices plummeted in the fourth quarter of 2008, as prices for oil and natural gas tanked and demand evaporated as the impact of global recession kicked in. Trade News October 2009

Against the odds, North American PE makers have put through increases averaging 4 cents per-pound to customers since 1 September. Many buyers were expecting PE prices to be flat in September, just as they were in August, until a late-month push by suppliers allowed the 4 cents to take hold. The increase occurred even in the absence of strong domestic sales and with an export market that's expected to be on the wane. But September exports maintained a high enough level to create tightness in the North American supply chain and give PE makers some leverage. One source estimated that more than 30% of PE made in North America in August and September was sold outside of the region. The unexpected price hike - and the change in the makeup of the market - isn't sitting well with some PE buyers. Plastics Business Reporter October 2009


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