Sigma Stretch Film Increase Notice

Please see attached letter from Dow Chemical Company. This increase is in addition to the previously announced $.05 cpp scheduled for September 1, 2013. It's important to note that this does NOT mean an increase has gone through yet, nor does it mean that either the September $.05 or October $.05 are guaranteed to be implemented. This is typical of the resin manufacturers today.




So what does this really mean? That's a very hard question to answer with any level of certainty, but here's my opinion. With respect to domestic (NA) PE pricing, the market has seen an increase the past couple weeks of between $.02 and $.03 cpp on the spot market. This tells us the 'non-contract' processors are paying more because of anticipated tightness in the weeks ahead. Obviously the situation in Syria and Egypt play a part in supply / demand issues on the global market and this will impact pricing domestically and a lot depends on what happens in the weeks ahead. Pricing in North American has been stable the past 5 to 6 months and an increase seems imminent in the near future. How much the resin manufacturers will actually get is a crap shoot and depends on a lot of unknown factors to be determined. It's a matter of WHEN the increase letters will come out.



We are entering the busiest time of the year and we have seen an uptick in order rate which has caused lead times to push our by 1-2 weeks depending on the product type. I strongly suggest you review your inventory position and place orders (especially pre-stretch products) sooner rather than later. I expect the Kentucky plant to implement order allocation on pre-stretch in the coming days / weeks end. We have already done so at our New Jersey plant. Current lead time is 1 week for stock cast and blown film and 3 weeks for custom. Lead time for pre-stretch products is now 4 weeks for standards and 5 weeks for custom. The time is now to get your inventory levels built up and plan for higher pricing and an extra week or two on lead times.



Thank you for your continued support and business. Please call me if you have any questions.