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New LL/LDPE price initiatives emerge.

A third round of price increases on LLDPE and LDPE resins were under way at press time and were expected to gain support from most suppliers. Missing from this round is HDPE, for which suppliers are still struggling to implement their last round of price hikes.

In other news, a move to raise prices of PVC dispersion resins met with resistance, forcing suppliers to modify their original price hikes.

LL/LDPE MOVE GAINS SUPPORT

New price initiatives on LLDPE and LDPE emerged in early October and appeared to have gained industry-wide support by mid-month. Quantum Chemical led off the move on LLDPE with a 4|cents~/lb increase across the board, effective Nov. 1. The increase is said to be driven primarily by higher ethylene feedstock costs and, according to sources at various suppliers, is also badly needed to remedy "unacceptably low margins." Although suppliers were successful in implementing the two latest rounds of price increases, they say there is still too much of a price differential--in the range of 4-6|cents~/lb--between LLDPE and LDPE, particularly in film resins.

By the second week in October, identical increases were issued by Novacor, Mobil, Union Carbide, Chevron, Exxon, and Dow. However, Dow also issued an increase on all high-pressure LDPE, which precipitated a general round of increases for that resin, as well.

Dow called for 2|cents~/lb on all LDPEs, effective Nov. 15. Novacor and Exxon followed suit, effective Nov. 1; as did Quantum, Rexene, and Westlake Polymer (Nov. 15); and Chevron (Dec. 1). Chevron also called for 3|cents~/lb more on its EVA copolymers. There were unconfirmed industry reports that Mobil and Eastman were also supporting the LDPE price increase.

HDPE SUPPLIERS STILL TRYING

Suppliers of HDPE resins continue efforts to implement their last round of increases--generally of 3|cents~/lb--which originally had an Aug. 1 effective date and were later pushed back to Oct. 1.

Sources at some major players stressed that the increases are badly needed, although they also concede that the industry is faced with an over-supply relative to demand. However, even the most pessimistic observers say they expect at least part of the increase to take hold. They expect to get the full 3|cents~/lb in certain HDPE markets, such as sheet and possibly dairy bottle grades, with only partial success in other blow molding and injection molding markets.

There were several unconfirmed industry reports that three HDPE suppliers--believed to be Occidental, Exxon and Solvay--had notified HDPE film customers that they would raise film grades by 1 1/2|cents~/lb Oct. 1 and again by a like amount Nov. 1.

Industry sources expect the HDPE business to continue to be burdened with overcapacity and soft pricing at least through next year. New domestic capacity of 600 million lb is coming on stream this year, with close to another billion lb slated for 1993.

PVC RISE RESISTED

Several key PVC suppliers had aimed to raise prices of their dispersion resins on Sept. 1. Occidental Chemical reportedly called for an increase of 4|cents~/lb across the board, while BFGoodrich asked for 3|cents~/lb. Most other key players, including Vista Chemical and Borden, are said to be seeking 2|cents~/lb.

A source at Formosa Plastics told PLASTICS TECHNOLOGY that the company has not supported, nor does it plan to support, such a move. "We really don't see a price increase getting any support from the marketplace at this time, due to the slowdown of key markets for these materials, including automotive, flooring and textiles," this spokesman said.

Supporting this view, it appeared by early October that PVC suppliers who announced price hikes on dispersion resins in late August had either rescinded them or were in the midst of renegotiating contracts. Occidental, of example, split its 4|cents~/lb price hike in two, asking for 2|cents~ Sept. 1 and another 2|cents~ Jan. 1.

TABULAR DATA OMITTED
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Copyright 1992, Gale Group. All rights reserved. Gale Group is a Thomson Corporation Company.

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Title Annotation:resin prices
Author:Manolis, Lilli
Publication:Plastics Technology
Article Type:Industry Overview
Date:Nov 1, 1992
Words:655
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