Mexico buyers discuss lower PVC prices on falling ethylene costs

31 May 2012 23:38  [Source: ICIS news]

HOUSTON (ICIS)--Polyvinyl chloride (PVC) buyers in Mexico are talking of a 2 cent/lb ($44/tonne, €36/tonne) price decrease for June because of eroding costs of feedstock ethylene, sources said on Thursday.

However, no price initiative has been formally announced for June in the domestic PVC market, according to participants.

Industry sources cited others factors driving down PVC prices in addition to declining ethylene costs, including concerns over slack demand from the usual export destinations for Mexican PVC, ample supply in North America, weakening global economies and the loss of the Mexican peso against the dollar.

Demand is weak on expectations that PVC prices will continue sliding, market participants said.

May pipe-grade PVC domestic prices in Mexico are assessed at $1,180-1,230/tonne DEL (delivered).

In the US, spot ethylene for June traded at 45.75 cents/lb on Thursday, its lowest level since February 2011.

The transaction puts the drop in the last two days at 11% based on a deal on Tuesday at 51.50 cents/lb.

The downtrend stems from weak demand and lower crude oil and feedstock ethane prices.

US ethylene spot prices have plummeted by around 40% in the past seven weeks.

The monomer traded at a record 76.125 cents/lb in mid-April on tight supply resulting from a busy cracker turnaround season.

The PVC producer in Mexico is Mexichem.

($1 = €0.81)

Additional reporting by William Lemos


By: Ron Coifman
+1 713 525 2653



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