Argentina’s second September PE price hike faces resistance

26 September 2012 21:20  [Source: ICIS news]

HOUSTON (ICIS)--A second September price increase announced in Argentina for all grades of polyethylene (PE) is encountering resistance amid softening demand, market participants said on Wednesday.

Argentina’s local producer Dow Chemical implemented a $100/tonne (€77/tonne) price increase on 1 September with good success, and later sought a $50/tonne increase starting on 15 September.

The second hike has not found support from market participants at a time when demand is softening for some grades.

Transformers are having a hard time increasing the price of finished products for end users and this, in turn, is slowing down distribution sales.

Some of the main applications for plastics are not performing as expected, a distributor said.

Demand from the agricultural sector has not kicked in as expected, and packaging as well as other widely used plastic items are moving slowly.

One of the reasons cited for the sales decline is inflation, which affects packaging and other widely used items.

The government is making inflation adjustments to various assistance programmes, hoping to promote increased consumption in the short term.

The PE increases may be postponed until October, but their implementation will depend largely on a rebound in the economy.

Production has declined with recent turnarounds at domestic PE plants, but the supply of PE resins does not appear to be a problem in the current demand conditions.

Natural gas supply has improved with warmer temperatures in the country, a transformer said.

Currently, low density PE (LDPE) prices in Argentina are in the range of $2,028-2,343/tonne DEL (delivered), linear low density (PE) butene prices at $1,943-2,301/tonne DEL, while high density PE (HDPE) prices are in the range of $1,921-2,241/tonne DEL, based on ICIS data.

($1 = €0.77)

By: George Martin
+1 713 525 2653

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