Corrected: Mexico PVC prices fall on depreciating currency, soft US market

06 October 2011 03:37  [Source: ICIS news]

Correction: In the ICIS story headlined “Mexico PVC prices fall on depreciating currency, soft US market” dated 6 October 2011, please read in the second paragraph … ($44/tonne, €33/tonne) … instead of … ($2,200/tonne, €1,650/tonne) ….  A corrected story follows.  

MEXICO CITY (ICIS)--Mexico’s polyvinyl chloride (PVC) prices are softer in October, driven by a weakening US market and depreciating Mexican peso, industry sources said on Wednesday.

Market players in Mexico are discussing the price decreases of at least 2 cents/lb ($44/tonne, €33/tonne), a local market participant said at the sidelines of the 17th annual PLASTIMAGEN international plastics exposition and conference.

The negotiations are ongoing and the PVC prices for October in Mexico are expected to be settled next week, the market participant said.

The depreciation of the local currency against the US dollar in the past two months has dampened downstream demand for finished goods as sales are transacted in devalued Mexican pesos.

As a result, the demand for PVC resins has been declining since August, although a large volume of transactions is finalised in US dollars at the resins level in Mexico.

The demand for PVC in the US is expected to slow down towards the end of the year in line with the traditional peak demand season, hence contributing to the soft market in Mexico in the fourth quarter of the year, sources said.

Trade activity in the US is expected to pick up gradually in the first quarter of 2012, supporting firm prices in Mexico early next year, according to the sources.

Meanwhile, the prices of PVC in the US are stable amid moderate demand, according to supply-side sources at PLASTIMAGEN.

Under the current economic conditions, the stable prices in the US are satisfactory, the participant said, adding that “flat is the new up”.

($1 = €0.75)

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By: Ron Coifman
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