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Chemical companies suspend US PE price increases for March

  • Author
  • Jacquelyn Melinek
  • Editor
  • Manish Parashar
  • Commodity
  • Petrochemicals

Houston — Chemical companies, including ExxonMobil Chemical Co., or EMCC, and NOVA Chemicals are suspending their price increases for March polyethylene until further notice.

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The changes come amid global concerns over the coronavirus pandemic and unprecedented events disrupting the marketplace.

EMCC is suspending its 4 cents/lb increase for March polyethylene cargoes until further notice, the company said in a letter to customers that S&P Global Platts obtained Monday.

The letter stated that the halt was implemented even though there was a "significant increase in demand for products that society needs."

Additionally, the company stated it does not "reserve the right to announce an increase for April should the situation warrant."

However, EMCC said there has been no impact to its global production facilities or supply chains for polymer and resin products.

Separately, NOVA Chemicals is suspending its 5 cent/lb increase for March for the foreseeable future for all polyethylene grades except LDPE, the company said in a letter to customers that Platts obtained Monday.

The increase of 2 cents/lb for all NOVA LDPE grades remains in place as of March 1.

The letter announced Monday that NOVA is "experiencing unprecedented events and subsequent actions which are changing our current business." But it added that its manufacturing sites remain fully operational and there is no impact to its supply chain.

EMCC, NOVA were not available for immediate comments.

The suspension periods for the chemical companies come amid global concerns over weak market sentiment and increasing restrictions on livelihoods and businesses due to the coronavirus pandemic.

NOVA stated that it was experiencing a surge in demand for products as consumers are buying more to prepare and comply with the need for social distancing.

Since there has been a "notable decline" in recreational and social activities, NOVA has shifted production focus to supply for products with higher demands.

Platts last assessed US LDPE at $937-$959/mt, US LLDPE at $717-$739/mt and US HDPE blowmolding at $717-$739/mt, all FAS Houston basis.