Mexico’s EPS producers seek June hikes

27 May 2008 18:51  [Source: ICIS news]

HOUSTON (ICIS news)--Expandable polystyrene (EPS) producers in Mexico are seeking to increase prices for all grades by 3 cents/lb ($66/tonne), effective on 16 June, producers’ sources said on Tuesday.

The initiative was crafted in view of soaring prices of styrene monomer (SM), which has traded last Friday at 70 cents/lb, a producer said.

The underlying cause for these initiatives was the high price of crude oil, which is affecting the whole petrochemical chain.

After surging to a record high of $135.09/bbl last week, crude values have moderated, but were still hovering around $130.00/bbl on Tuesday.

Producers were finding safety in numbers, because many of them have expressed intentions of raising prices in the near term.

US producers who routinely supply EPS to clients in Mexico have already announced similar price increases for the second half of June, in addition to 6 cent/lb hikes already implemented in April and May with varying degrees of success.

It was not clear if the initiatives would find market support in Mexico, but conditions there were more favourable than those in the US, where the construction sector is still affected by the housing crisis and drying credit availability on residential and commercial projects.

Packaging sector demand is seasonally in Mexico until the end of June, but construction demand has remained stable, supporting producers’ optimism of implementing the price increases.

Prices in Mexico were 100-104 cents/lb, according to global chemical market intelligence service ICIS pricing. However, there were clients paying below and above the published range, producers said.

For more on expandable polystyrene and styrene visit ICIS chemical intelligence
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By: George Martin
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