(Reuters) -Dow CEO Jim Fitterling said on Thursday the polyethylene market is setting up for positive price action in September following a dip in the second quarter due to tariff uncertainties.

"There's no sign that there's a massive inventory build. There's no sign of anything getting locked up or China falling out of the market to the point where it backed up exports," Fitterling said at the Morgan Stanley Laguna Conference.

In the third quarter, the chemicals maker said it has observed stable volumes, strong export capabilities and low-cost positions in the United States.

In July, Dow executives had flagged that the ongoing tariff and geopolitical uncertainty impacted demand patterns, particularly in the industrial infrastructure and durable goods sectors.

The company expects a reduction in interest rates to promote a recovery in depressed end markets, such as housing and durable goods, which are highly rate-sensitive and tied to affordability, Fitterling mentioned.

Regarding its net-zero petrochemical project, Path2Zero production complex, in Alberta, Canada, Fitterling said an update will be provided by year-end as the company is adding additional capacity there.

"That increment of capacity leverages a lot of existing infrastructure that's at that site. So it is going to compete with our Texas investment down in the Gulf Coast."

In April, the company said it would delay the planned construction of the project to conserve cash amid unfavorable market conditions.

Dow sees a one-to-two year delay in the project's timeline, which was first announced in 2021, fully financed in 2023, and scheduled for construction to begin in 2024.