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LL/LDPE prices move up.

It looks as if selling prices for LL/LDPE resins are on their way up as a result of this year's second round of polyethylene price increases, which took effect in August. Suppliers generally called for 4|cents~/lb increases for LL/LDPE, blaming the move on the need to improve profit margins. The 3|cents~/lb increases for HDPE announced at the same time have been delayed until this month. Earlier this year, suppliers successfully increased prices 3-4|cents~/lb for LL/LDPE and, eventually, HDPE. At least one supplier indicated that still another PE price increase--particularly for LDPE--could emerge before the end of the year.

Meanwhile, the latest PS price initiative failed due to lack of support.


Following the successful implementation of price increases for LL/LDPE earlier this year, suppliers are expecting similar results for their second round. Pricing of LDPE resins is already very firm, giving suppliers reason to believe that the August hikes will be fully in place before long. "We got some of the increase through in August and we'll get the rest in September," says one.

Likewise, LLDPE suppliers are optimistic that increases for these resins would be fully in place by the end of September. They, too, report that some processors were already paying higher prices in August. "There's not as much LLDPE out there as some people had been projecting. Continued strong demand coupled with production problems at some suppliers served to tighten things up quite a bit," says one supplier.

Contributing to the stronger-than-expected demand for LLDPE is the tight supply of LDPE, say suppliers. Explains one major producer, "There's no question that there has been some switching movement--perhaps around 10-15%--from LDPE to LLDPE over the last several months."


As with this year's first round of increases, August's 3|cents~/lb HDPE hikes are being delayed. At press time, it did TABULAR DATA OMITTED not appear that any supplier had rescinded those increases, but several indicated they will be pushed back to a later date--most likely October 1. While most agree that HDPE is in oversupply, producers maintain that prices eventually will move up this time as they did before.

At least one source concedes it will be difficult to get an increase across the board. "It's so competitive now that suppliers are looking to get as much as they can wherever they can. There are some places--say, in dairy grades--where they may be able to get the full increase. In other blow molding grades, they may get nothing."

However, another supplier sees a good chance of getting the increases through in HDPE films. "Demand has been increasing within the last couple of weeks. One factor is that the price differential between LLDPE and HDPE film grades is causing some people to opt for HDPE in certain areas, e.g., institutional trash bags."


The 3|cents~/lb PS price increase reported last month (p. 131) that was led by Dow Chemical failed to gain industrywide support. While the move was supported by Novacor Chemical and BASF Corp., other major players such as Huntsman Chemical, Fina Oil & Chemical, Chevron Chemical and Amoco Chemical opted not to go along with the increases.

Sources at both Novacor and BASF confirm they have rescinded their increase announcement. Dow, meanwhile, chose to institute a 3|cents~/lb TVA (temporary voluntary allowance) on PS resin prices, which the company said would be removed the first of this month.


Arco Chemical Co., Newtown Square, Pa., issued two consecutive price increases on its expandable polystyrene resins. Effective July 1, the company raised prices of modified grades by 5|cents~/lb and unmodified grades by 2|cents~/lb. Then, effective August 1, Arco raised prices 6|cents~/lb for modified EPS grades and 2|cents~/lb for regular grades. It appears that other suppliers have since followed with similar increases.
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Title Annotation:resins
Publication:Plastics Technology
Date:Oct 1, 1992
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