Latin American PVC prices to firm in Feb on production costs

27 January 2012 23:22  [Source: ICIS news]

HOUSTON (ICIS)--Latin American polyvinyl chloride (PVC) markets are projected to continue firming in February on rising production costs and snug supply, sources said on Friday.

Talk of price increases for next month surfaced in domestic markets in Argentina, Brazil, Colombia, Mexico and the Pacific coast of South America, at different levels depending on country.

The largest proposed increase was heard in Brazil, with a maximum of around $120/tonne (€91/tonne). Another hike initiative for February was heard at $50/tonne in Argentina.

Prices rose in most Latin American countries in early January and remained steady the rest of the month. The exception is Venezuela, because an increase in the share of cheaper domestic PVC over more expensive imports in the resin mix offered by Pequiven resulted in lower prices to PVC processors. February PVC prices in Venezuela are expected to roll over from January.

PVC supplies from US and Asian suppliers are tight, with some sources noting close to sold-out positions for February. A seller in Asia said that if ethylene continues to be tight in the US, as appears likely because of the maintenance season, PVC prices into Latin America will probably increase again in March.

Resin demand is seasonally healthy throughout the region, and rising in Colombia and Mexico as participants build up inventories. However, demand in Brazil is not strong, market sources in the country said.

Domestic prices for pipe-grade PVC in Brazil stand at $1,370-1,530/tonne DEL (delivered) in January, as assessed by ICIS.

($1 = €0.76)

For more on PVC visit ICIS chemical intelligence

By: Ron Coifman
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