09 December 2011 19:25 [Source: ICIS news]
HOUSTON (ICIS)--Polyethylene (PE) and polypropylene (PP) prices are set to increase by 50% in Venezuela in the short term, although the proposed increase has not been authorised yet, transformers said on Friday.
The magnitude of the proposed increase makes it a large one, but domestic prices in Venezuela would still be cheaper than imported material, one transformer said.
Taking low density PE (LDPE) prices as an example, the price of domestic product in Venezuela is slightly over bolivares (Bs) 6,000/tonne ($1,395/tonne, €1,046/tonne).
With a 50% increase, the price would go to about Bs9,000/tonne – still cheaper than the nearly Bs12,000/tonne price that transformers pay for imported resins.
In international markets, LDPE actually sells in the range of $1,500–1,600/tonne. However, transformers in Venezuela do not pay this price for imported resin because they do not deal directly with foreign sellers.
State-run petrochemical company Pequiven buys the imported resin, and the prices they get are not the best. Another theory is that Pequiven adds a premium to imports before domestic distribution.
With the exception of polystyrene (PS) resin prices, which are about twice as much as those in international markets, domestic plastic resins in Venezuela have been cheaper than imports for a long time.
When imports were needed to complement domestic production, prices were pro-rated proportionally.
($1 = €0.75)
($1 = Bs4.30)
For more on PP, PE and PS visit ICIS chemical intelligence
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