Formosa Plastics on Wednesday postponed its 5 cents/lb January polyethylene price increase for US buyers, a company source and multiple buyer sources said.
Formosa was one of multiple major producers seeking previously unimplemented increases for the month. Producers have unsuccessfully pushed for the 5 cents/lb increase since October.
Multiple buyer sources said Formosa agreed Wednesday afternoon to push the increase back to February and meet competitive pricing for the month. A company source confirmed the increase had been delayed.
January contracts were unsettled Wednesday, with market talk suggesting a rollover or possible decrease were the most likely outcomes for the month.
While domestic sales have been strong in recent months and producer inventories were talked in good shape, sources said declining global oil prices could put additional pressure on the US market this month, with some market participants suggesting a decrease wouldn’t come as a surprise.
The key, a source said, would be whether recent non-market adjustments by producers for some — but not all — customers would be enough to keep major buyers happy.
December high density polyethylene contracts were assessed for blowmolding at 62-63 cents/lb ($1,367-$1,389/mt) delivered rail car basis; at 62-63 cents/lb ($1,367-$1,389/mt) for injection grade; and at 65-66 cents/lb ($1,433-$1,455/mt) for HMW film.
December domestic low density polyethylene contracts were assessed at 71-72 cents/lb ($1,565-$1,587/mt) for delivered rail cars, while linear-low density butene contracts were assessed at 58-59 cents/lb ($1,279-$1,301/mt) for delivered rail cars.
