01 August 2008 22:32 [Source: ICIS news]
HOUSTON (ICIS news)--Mexico’s caustic soda producers implemented on Friday a $60/dmt (dry metric tonne) price hike amid tight supply conditions and rising import costs, they said.
The increase pushed local prices to $930-980/dmt (€595-627/dmt) ex-tank, up from $870-920/dmt in July, according to global chemical market intelligence service ICIS pricing.
Producers said the increase was implemented without negotiation with buyers.
Mexico’s caustic soda producers do not produce enough material to meet all domestic demand, but they said prices for caustic soda imported from Europe to make up the difference were rising quickly amid globally tight supply conditions.
The prices hike was necessary to pass the costs to buyers, producers said, now that import prices for caustic soda in Mexico had risen swiftly to $850-900/dmt CFR (cost and freight).
“We know these prices are very high, but we were worried about the effect higher prices would have on demand when the price was $500 [per dmt] and again when it was $700,” one producer said. “Our goal is to sell at the market price.”
With no signal that supply conditions in Mexico would loosen - particularly amid news of a possible maintenance turnaround at a Petroleos Mexicanos (Pemex) chlor-alakli plant in August - producers said prices were likely to continue along an upward trajectory for the foreseeable future.
Caustic soda producers in Mexico include Mexichem and Iquisa.
($1 = €0.64)
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