02 November 2012 21:41 [Source: ICIS news]
HOUSTON (ICIS)--Argentina’s polystyrene (PS) prices will remain steady in November, despite large increases in feedstock benzene, a company source said on Friday.
Petrobras Energia, Argentina’s main PS producer, has been watching the surge in benzene prices closely and expects erosion of production margins in the short term as its feedstock costs increase.
Price increases in Argentina are approved or rejected by government officials, and as such, lost margins are not necessarily a strong enough reason for a price increase.
However, when international prices go down, domestic producers are allowed to keep prices steady. This is intended to compensate for the rejection of earlier increase initiatives.
Ultimately, it means that prices in Argentina are not necessarily in sync with international-market gyrations, and producers can only hope that compensating moves by the government will not leave them with red ink.
General purpose PS (GPPS) prices in Argentina are in the range of $2,189-2,357/tonne (€1,686-1,815/tonne) DEL (delivered), while high impact PS (HIPS) prices were in the range of $2,315-2,504/tonne DEL, according to ICIS data.
Another factor in the price erosion of commodities is the Argentine peso (Ps), which has weakened against the dollar.
At the start of this year, the US dollar was at Ps4.31. Now, the dollar is at Ps4.77, according to the official exchange-rate listing.
The so-called blue dollar, the unofficial parallel exchange rate, is at Ps6.33, according to the local press.
($1 = €0.77)
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