20 June 2013 22:35 [Source: ICIS news]
HOUSTON (ICIS)--Street protests in several Brazilian cities are driving polyvinyl chloride (PVC) buyers to postpone purchases and investments on expectations of tough times ahead, industry sources said on Thursday.
Market participants in Brazil noted concern about the rallies in different cities protesting against corruption, poor services and increasing inflation.
Credit is tightening, and the number of borrowers is tapering, as many have a high debt burden already. Plastic resin converters are worried that customers will not make payments by due date, market sources said.
Although no proposals have been heard for July PVC, market participants are pointing to the devaluation of the Brazilian reais as a driver for higher domestic prices next month. In the past month, the reais has lost more than 10% of its value compared with the US dollar.
Resin business in Brazil is considered adequate in terms of volume, on support from moderate activity during the industry’s traditional slow period, currently in effect. PVC demand is expected to peak on seasonality during the second half of the year.
PVC domestic prices in Brazil for June were flat from May and April at $2,000-2,200/tonne (€1,500-1,650/tonne) DEL (delivered) for pipe grade, local sources said.
PVC producers in Brazil are Braskem and Solvay.
($1 = €0.75)
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