Venezuela devaluation sparks supply fears for PE, PP transformers

01 March 2013 19:01  [Source: ICIS news]

HOUSTON (ICIS)--Venezuela’s transformers are growing concerned about the supply of polyethylene (PE) and polypropylene (PP) resins after the devaluation of the domestic currency earlier in February, market participants said on Friday.

Shipments of plastic resins were suspended on 8 February and resumed on 14 February, but volumes of imported product have been withheld until this week. Distribution of product has resumed, but with new prices, sources said.

Transformers are asking for a pro-rated price of plastic resins, because the difference in the price of domestic and imported resins is very large.

The value of domestic raw materials is currently around $900/tonne (€700/tonne), while the price of imported resin is in the order of $2,800/tonne.

Transformers are also concerned with loading problems at El Tablazo. On 19 February there was a reduction of allocations for loads of PE and PP. The number of loads allowed was reduced from 200 to 90.

There are other logistic concerns.

Transformers have been asked to load material on the last day of February, and if they fail to do so, they would be risking their allocation of plastic resins, even when such allocation has already been paid to Coramer, Pequiven’s distributor.

Coramer has ceased to distribute with their usual vehicles, because the cooperatives that provide this service do not have operational vehicles.

This forces transformers to secure their own transportation despite a number of limitations such as scarcity of vehicles, increased freight costs, lack of security for drivers that are robbed while queuing up to receive their loads and the consequent refusal of many drivers to pick up loads at El Tablazo on safety concerns.

AVIPLA, the Venezuelan association of the plastic industry, has elevated these concerns to the local producer, asking also about a decline in the volumes of plastic resins assigned to some of their members.

($1 = €0.77)

By: George Martin
+1 713 525 2653

AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly