05 July 2012 21:21 [Source: ICIS news]
HOUSTON (ICIS)--Mexico’s polystyrene (PS) prices are poised for a reduction in July as local producers and importers lower prices for all grades, under pressure from lower crude oil values, market sources said on Thursday.
Mexico’s Resirene, the largest domestic producer, is lowering general purpose PS (GPPS) prices by 2 cents/lb ($44/tonne, €35/tonne), while high impact PS (HIPS) prices are headed down by as much as 3 cents/lb, a company source said.
The measure is also a reaction to similar moves by other domestic and US competitors that are responding to market expectations for July.
The only question on producers’ minds is the staying power of feedstock benzene, which has remained at high levels despite the demise of crude oil values.
Sales volumes were decent in June, according to sellers, and July prospects are expected to improve with the price reduction.
Part of the pressure to reduce PS prices comes from polypropylene (PP), a resin that can substitute PS in some applications. PP resins are currently substantially cheaper than PS resins after a large decline in propylene values last month.
Transformers with capabilities to run either resin switch raw materials as needed to reduce costs.
Prior to the July reduction, GPPS prices were in the range of $1,739-1,830/tonne DEL (delivered), while high-impact PS (HIPS) prices were at $2,059-2,150/tonne DEL, based on ICIS data.
The main PS producers in Mexico are Resirene, Styrolution Mexicana (Ex-BASF) and Idesa.
($1 = €0.80)
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