Formosa Plastics USA raises April prices 9 cents/lb: letter

New York — Formosa Plastics USA will increase the selling price for all its Formolene polyethylene products sold in the US by 9 cent/lb as of April 1, the company said.

The rise will be in addition to any previously announced price increases, the company said in a letter sent to customers on March 15 and seen by S&P Global Platts.

"Orders for all products will be subject to our ability to supply and is based upon normal operations of our facilities," the company said.

Formosa Plastics was not available for comment on the letter.

Other petrochemical producers Dow Chemical and Equistar Chemical have announced price increases of 7 cent/lb and 6 cent/lb, respectively, for April 1.

The rise for the two companies will be in addition to both companies' previously announced price increase of 7 cent/lb as of March 1, which will be implemented as well, the companies said in a letter to customers seen by Platts.

"Formosa had priced their products too low this month [March]. They are continuing to have production difficulties, so I think [the price difference] is more a message to export contract customers," one source said.

In recent months, petchem producers have implemented the same price increase for polyethylene products sold in the US. But due to the extremely tight supply in the PE market right now, some producers are charging more for inventory to price their products properly, one trader source said.

Platts assessed domestic PE contracts unchanged week on week on March 10. That was after the February contract settled 7 cents/lb higher on March 3 for all domestic PE contracts, based on limited supply and high demand in an already tight market, a source said.

In export markets, US spot PE pricing was assessed flat on the day March 15 after Platts assessed low-density PE at $1,830-$1,852/mt FAS Houston, linear low-density PE butene at $1,654-$1,676/mt FAS Houston and high density PE blowmolding at $1,642-$1,664/mt FAS Houston.