Argentina’s Sep PP prices to increase by $100/tonne

31 August 2011 22:26  [Source: ICIS news]

HOUSTON (ICIS)--Argentina’s polypropylene (PP) producers are seeking a $100/tonne (€69/tonne) price increase in September for all grades, buyer sources said on Thursday.

Buyers said the initiative was coming from both producers in Argentina, Petroken and Petroquimica Cuyo.

The increase comes amid shortages of copolymers caused by reduced ethylene supply.

Petroquimica Cuyo is the only maker of copolymer resins in Argentina.

It was not clear if the September price hike was devised to offset higher raw materials costs or to improve margins.

However, feedstock propylene contracts in benchmark US markets are poised to settle flat or slightly lower in September. This would suggest the hike is intended to lift sagging margins.

The Argentine government had frozen plastic resin prices early in the year to keep inflation under control. This affected margins for producers who absorbed higher raw material costs.

Meanwhile, the granting of import licences remains a slow process in Argentina, according to transformers who are still waiting for the licences months after filing applications.

Thus, the shortages of copolymers linger on despite the availability of Brazilian product in Mercosur markets.

Prior to the September increase, PP prices in Argentina were in the range of $1,9152,070/tonne DEL (delivered) for homopolymers, based on ICIS data.

$1 = €0.69

For more on polypropylene visit ICIS chemical intelligence

By: George Martin
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