14 February 2012 20:16 [Source: ICIS news]
HOUSTON (ICIS)--Mexico expandable polystyrene (EPS) prices rose this week, as February price hikes were implemented, market sources said on Tuesday.
Mexico prices rose on average by 5 cents/lb ($110/tonne, €84/tonne) for all grades of EPS, based on higher feedstock costs, including benzene and styrene, sources said.
The increase follows a successful 4-6 cent/lb price hike implemented in mid-January.
While many market participants agreed the 5 cent/lb increase had been implemented, one buyer said prices only increased on average by 3 cents/lb for certain high-volume customers.
Producers have announced an additional 3 cent/lb increase, effective on 16 February. Sources predicted that increase would be pushed to 1 March.
The increases are beginning to affect downstream demand, according to buyers, who said they are having trouble passing along the price increases to their customers.
"They are saying they don't have any confidence that the prices will be stable, so they don't want to keep buying EPS," said one buyer. "This is a problem right now."
The buyer said alternative materials, such as cardboard for packaging and extruded polystyrene (PS) for insulation, are beginning to gain market share in Mexico.
With the price increase, Mexico EPS prices were assessed by ICIS at 112-116 cents/lb for block material and 108-112 cents/lb for package material.
Major Mexico EPS producers include Polioles and Polidesa.
($1 = €0.76)
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