11 October 2011 23:13 [Source: ICIS news]
HOUSTON (ICIS)--The partial recovery of the Brazilian real versus the US dollar is diminishing support for polymer price increases announced earlier in the month, market sources said on Tuesday.
The proposals followed a sharp and sudden increase of the US dollar versus the real (R).
Local producer Braskem announced intentions to increase the price of all grades of polyethylene (PE) in October by R570/tonne ($326/tonne, €238/tonne).
Braskem is also increasing in October the price of all grades of polypropylene (PP) by R400/tonne.
Polystyrene (PS) producers Innova and Unigel announced price increases of at least R300/tonne in October.
However, the announcements were made when the US dollar had skyrocketed to more than R1.90, stabilising later around R1.86 after government intervention.
But the dollar has sunk in the past few days to values around R1.75-1.77. This value is still high compared with R1.63in the first part of September.
The question these days is how much of the initial October increase will be implemented, considering that the dollar value is still a moving target and demand is soft.
Buyer sources in Brazil said buyers have accumulated stock ahead of the October increase and only those that absolutely needed to replenish stocks have bought in October at the new prices. But even those purchases were at minimal quantities.
The answer may become clear next week, which is typically the key week of the month for sales, a distributor said.
Large buyers in Brazil usually make their purchases in the second half of the month, local sources said.
($1 = €0.73)
($1 = R1.75)
For more on polymers visit ICIS chemical intelligence
For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.
Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
|ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index|
Asian Chemical Connections