Mexico’s EPS hikes seen to continue in August

15 July 2008 22:29  [Source: ICIS news]

HOUSTON (ICIS news)--One of two expandable polystyrene (EPS) producers in Mexico is seeking a 5 cent/lb price increase effective on 15 August, a producer said on Tuesday.

It was not clear if the August increase would take place as announced, because one producer had just started the implementation of a 4 cent/lb increase effective on Tuesday, while another producer was seeking a 3 cents/lb increase on the same date.

Transformers conceded the July increases were likely to succeed, partially or entirely, depending on purchase volumes. However, the outcome of the August initiative was still in doubt.

Prior to  the Tuesday increases, EPS price of block material in Mexico was at $2,270-2,358/tonne (€1,430-1,486/tonne) according to global chemical market intelligence service ICIS pricing.

Producers were aiming to recover production margins after steep increases in raw materials, which were spawned by surging crude oil prices. However, oil prices plunged on Tuesday on dire financial news. The NYMEX crude contract for August delivery settled at $138.74/bbl on Tuesday - a loss of $6.44/bbl from the previous day.

Demand from the packaging sector remained weak in Mexico, as expected for this time of the year, but one producer said there were already a few signs of recovery for this segment.

Construction demand looked healthier, maintaining levels seen last year, but it is not growing, a producer said. However, another producer reported 5% growth this year for the construction sector.

Although the implementation of price increases was meeting success, EPS demand in Mexico was gradually declining, a producer said.

EPS producers in Mexico are Polioles, and Grupo Idesa. The latter has a joint venture with NOVA Chemicals called Novidesa.

($1 = €0.63)

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By: George Martin
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