Latin American PVC prices trending down on weak ethylene

18 June 2010 21:17  [Source: ICIS news]

HOUSTON (ICIS news)--Polyvinyl chloride (PVC) prices in Latin America were trending down in most countries, in line with weaker feedstock values and softening market sentiment in the Americas, participants said on Friday.

PVC prices were softening from north in Mexico to south in Argentina, sources said.

The exception was Venezuela, where prices were stable on government mandate but not on market dynamics, according to local sources.

Demand was largely weak throughout the Americas, as buyers anticipated further price erosion.

In Mexico, local participants said PVC prices continued to drop. Domestic prices for pipe-grade were said to be clustering at the lower end of a $1,000-1,050/tonne (€810-851/tonne) range, down from $1,080-1,140/tonne one week earlier.

The lowest prices in Mexico were driven by cheap imported resin, while the local producer, Mexichem, was offering material at somewhat higher levels.

PVC prices were expected to reach bottom in July in the very high $900s/tonne, sources said.

Activity in the pipe sector was lacklustre, since participants were waiting for prices to reach bottom before building inventories.

In Argentina, PVC demand was softening on expectations of lower prices, buyers said. Market sentiment in Argentina weakened as it fed off from talk in other countries in the region. A few participants noted some price slippage.

Import offers were heard in the mid-to-low $900s/tonne CFR (cost and freight)..

Gas rationing that prioritised home over industrial use during the winter in South America was in place, but the effect on ethylene production was only moderate, sources said.

Argentina’s largest natural gas-distributor, Metrogas, sought bankruptcy protection after an 11-year government rate freeze. The government said it would supervise the distributor to guarantee services.

Latin American PVC producers include Mexichem, Braskem and Solvay.

($1 = €0.81)

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By: Ron Coifman
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