05 January 2012 22:29 [Source: ICIS news]
HOUSTON (ICIS)--Mexico-based Pemex Petroquimica increased the price of all grades of polyethylene (PE) by 3%, endorsing existing proposals for price increases in PE imports, a Pemex commercial manager said on Thursday.
Domestic PE prices in Mexico have been steady since October 25, with only a small reduction in the price of medium-density grades effective on 22 December.
December demand was strong compared with the same month of 2010, and the prospects for January remain favourable, said Alex Ramirez, commercial manager.
PE importers announced increases for January ranging from 5–7 cents/lb ($110–154/tonne, €85–119/tonne), based on expected shortages of ethylene as a result of upcoming programmed cracker maintenance in the US.
Rising crude oil prices caused by tensions in the Middle East are adding support to the initiatives.
Buyers sought to reduce inventories at the end of the year to minimise taxes, but must replenish inventories in January.
Although the announced January price increases for imports are for a minimum of 5 cents/lb, buyers do not see enough justification for an increase of that magnitude.
The Pemex hike is expected to solidify a 2-3 cent/lb increase for domestic and imported grades alike.
Prior to today’s increase, domestic low density PE (LDPE) prices were in the range of $1,507-1,650/tonne FOT (free on truck), based on ICIS data.
Linear low density PE (LLDPE) butene prices were in the range of $1,248-1,45/tonne FOT, while high density PE (HDPE) blow moulding prices were at $1,241-1,404/tonne FOT.
Currency volatility has been a factor lately on pricing policy, but the US dollar has stabilised in the range of Mexican pesos (Ps) 13.50-13.80.
($1 = €0.77)
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