New York — NOVA Chemicals and Chevron Phillips Chemical plan to increase the prices for all their polyethylene products by 4 cents/lb in June, the companies told customers in letters obtained by S&P Global Platts on Thursday.
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Chevron Phillips and NOVA Chemicals are the latest in a group of producers announcing plans this week to implement a price increase on US polyethylene products in an attempt to stabilize or increase pricing in the PE market, sources said. Formosa, Dow Chemical, and LyondellBasell's subsidiary Equistar Chemicals also announced a 4 cents/lb increase for PE products earlier this week.
The price increase for all these producers will be effective June 1.
The announcements have become a trend this week as producers have followed one another to push for higher PE product pricing on the possibility of demand returning, as the US tries to reopen the country amid the coronavirus pandemic, a trader said.
Producers are preparing "in case [the] situation turns in their favor," the trader said. "I'm sure other producers will follow soon. But whether it will go through is another story."
Neither Chevron Phillips nor NOVA Chemicals was immediately available for comment.
Chevron Phillips' customers were told to contact their sales representative with questions regarding polyethylene pricing and current industry conditions during this "challenging period."
"We understand that navigating through this difficult environment may increase the volatility regarding your product needs and deliveries," Chevron Phillips' letter said.
Low density PE and high density PE remained flat week on week Wednesday, while linear low density PE rose. This was a result of producers halting offers in an attempt to stabilize or increase prices, sources said.
On Wednesday, Platts assessed US LDPE at $849-$871/mt, US LLDPE butene at $596-$618/mt and US HDPE blowmolding at $607-$629/mt, all on a FAS Houston basis.