15 March 2013 09:21 [Source: ICB]
The drop of prices for polyethylene terephthalate (PET) and corresponding feedstocks in Asia last week were sure to place downward pressure in Latin American markets in the near future, sources said on 5 March.
No immediate changes were evident in domestic or import business in the Americas during the first week of March, but the weakening in PET and feedstock markets in Asia will affect resin prices in Latin America in the near future, regional sources said.
PET prices in Asia fell by as much as $30/tonne (€23/tonne) and feedstock paraxylene (PX) by as much as $97/tonne during the week that ended on 1 March. Even if the downtrend in Asia continues, the effects would generally not be felt in markets in the Americas until a month or two later, the sources said.
Dynamics in Asia would probably become evident first in non-producing countries along the Pacific coast of South America, which rely on imports from Asia, the US and Mexico. PET prices in producing countries in Latin America would lag direction from Asia by several weeks and possibly by as much as a couple of months, participants said.
A proposed 2 cent/lb ($44/tonne) hike in Mexico was rescinded, and March PET business is being concluded at a rollover from February at $2,180-2,280/tonne DEL (delivered). March PET prices are expected to remain flat from February in Argentina, Colombia and Mexico.
However, a $40/tonne price increase announced for March in Brazil was still under discussion, according to participants.
Demand for PET was steady in South America, especially in Argentina and Brazil even as the high season for bottled drinks was ending.
Demand was improving in Mexico in regions where the weather was getting warmer, sources said.
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