18 December 2008 18:28 [Source: ICIS news]
HOUSTON (ICIS news)--Brazil’s Braskem reduced polypropylene (PP) prices for a second time in December to keep up with domestic competition amid softening demand, a company source said on Thursday.
After an initial reduction of about Brazilian reais (R) 200/tonne ($85/tonne) in December, Braskem lowered prices again this week by the same amount.
Competition was heating up in the Brazilian domestic market as buyers expected discounts based on deeply discounted propylene prices worldwide.
Prior to this week’s discount, prices for raffia homopolymers were hovering at about $1,900-1,950/tonne (€1,330-1,365/tonne) FOT (free on truck), according global chemical market intelligence service ICIS pricing.
Prices from Asia and the US Gulf have been a threat, arriving to South America at levels below $1,000/tonne, but PP buyers have not flocked to imports, despite the lower prices. For this reason and the fact that Brazilian producers enjoy 15% protection with import tariffs, the price decline in Brazil has been slower than those in countries such as Chile or Peru.
Domestic competition among producers was the stronger reason for the price reduction, sources in Brazil said.
($1 = €0.70 = R2.36)
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