Dow Chemical plans to raise the price of all types of polyethylene (PE) by 4 cents per pound (USD88 per tonne) from September 1, or as contracts permit, ICIS reports citing the company’s letter to customers.

The letter said the September increase would be in addition to the previously announced Dow price increase of 3 cents per pound (USD66 per tonne) from August 1.

Contract prices for polyethylene in the United States have been declining over the past two months. A decrease in contract prices along with growing export volumes led to a decrease in margins for polyethylene producers.

Ethylene feed prices have also risen recently, reducing the difference between contract ethylene prices and PE contract prices. Spot ethylene prices have risen significantly over the past few weeks due to additional spot activity after the fire at the ExxonMobil plant in Baytown, Texas, olefins, and other production problems.

PE supplies to the United States remain sufficient. American manufacturers added more than 3 million tons per year of new PE capacities in 2017 and plan to increase a similar amount this year.

ExxonMobil recently launched a new line with a capacity of 650 thousand tons per year at its plant in Beaumont, Texas.

LyondellBasell plans to launch a new plant with a capacity of 500 thousand tons of PE per year in La Porte, Texas, in the fourth quarter.

Earlier this year, Sasol launched a line for the production of linear low-density polyethylene (LDL) with a capacity of 470 thousand tons per year and recently announced that it is postponing the launch of a factory for the production of high-pressure polyethylene (LDPE) with a capacity of 420 thousand tons per year by four to six weeks from earlier planned August.

According to the ICIS-MRC Price Survey, in Russia purchasing activity in the local market is low, but demand is stable. The excess supply on the LDPE market is not so serious due to the long downtime of the two manufacturers. In the IPA segment, excess supply remains, but it no longer puts pressure on prices. Last week, both price increases and declines were recorded. Most significantly cheaper LDL C4.

The main producers of polyethylene in the United States are Chevron Phillips Chemical (CP Chem), DowDuPont, LyondellBasell, ExxonMobil, Formosa, INEOS, Total Petrochemicals and Westlake.