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More Price Hikes Announced for February North American Polyethylene

North American January Polyethylene (PE) contracts have yet to be finalized, but a second major resin producer has announced its intention to raise contract prices in February as part of a collective push to stem the slide in resin prices seen in the fourth quarter of 2021.

In a letter to customers on Wednesday, LyondellBasell said effective February 1, its Equistar Chemicals business will implement a $0.05/lb price increase on all grades of HDPE and LDPE sold in North America and a $0.07/lb price increase on all grades of LLDPE sold in North America. The February price announcement is in additional to the $.04/lb price increase LyondellBasell nominated for January contracts.

The larger price increase on LLDPE comes amid tighter supply and availability and a planned turnaround reported at Formosa's Point Comfort, TX facility. Film grade resins are also expected to see an impact due to tight availability for slip additives from PMC Biogenix following a fire and subsequent force majeure on products from its Memphis, TN facility last week.

LyondellBasell's price increase, which is the highest thus far, also comes the same day Dow Chemical announced it would seek a price increase for February. Dow said it will be implementing $.04/lb of its previously announced $.07/lb price increase for all its Polyethylene resins sold in the US and Canada, respectively, effective January 1, and it will increase prices by another $.04/lb, effective February 1.

Polyethylene buyers have seen significant price relief Q4 2021, which included a $.15-.17/lb decrease in PE contracts over the three-month period. Since the start of 2022, however, spot resin prices for PE have been steady through the first half of January, which could be construed as somewhat bullish having bucked the steady Q4 price erosion.

By Brian Balboa for The Plastics Exchange.

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