PVC values rise 34% in Venezuela on new price lists, devaluation

17 February 2011 23:23  [Source: ICIS news]

HOUSTON (ICIS)--Domestic polyvinyl chloride (PVC) prices in Venezuela rose 34% as new price lists adjust for the currency devaluation of early January, a local producer said on Thursday.

The bolivar weakened from bolivares fuertes (Bs) 2.60/dollar to Bs4.30/dollar in early January, but domestic prices in bolivares were not adjusted at that time to reflect the devaluation, sources said.

Pequiven published new lists that were effective immediately, pricing extrusion pipe-grade PVC resin at Bs3,170/tonne ($737/tonne, €545/tonne) DEL (delivered) on 30-60 day credit terms, sources said. The price for injection-grade PVC for pipe fittings was higher at Bs3,390/tonne, same basis.

The new price list for domestic PVC still makes Venezuelan resin the cheapest in the region and could drive some material to neighbouring countries. Local sources suggested that Venezuelan resin could be sold for greater profit across the border, instead of being used for processed or finished PVC goods in the domestic market.

International PVC offers into Latin America hover in the vicinity of $1,100/tonne CFR (cost and freight) for pipe-grade material.

Participants in Venezuela said the local producer would likely be considering exporting PVC, as domestic consumption is low on concerns over government policies toward private construction, while export prices for PVC are attractive.

Sources close to Pequiven, however, projected significant growth in PVC demand because the Venezuelan government will be investing in public construction beginning in the second quarter, ahead of presidential elections in 2012.

Following the devaluation, but before the price increases, pipe-grade PVC prices in Venezuela were assessed at $560-570/tonne, according to ICIS.

($1 = Bs4.30)
($1 = €0.74)

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By: Ron Coifman
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