Dow Chemical, Braskem to increase July PE prices in Brazil

02 July 2013 22:17  [Source: ICIS news]

HOUSTON (ICIS)--Dow Chemical notified its clients in Brazil that the prices of all grades of polyethylene (PE) offered by its Brazilian subsidiary will be increased by Brazilian reais (R) 200/tonne ($89/tonne, €69/tonne) as of 1 July, a company source said on Tuesday.

The increase is in addition to a price increase of R150/tonne announced on 10 June.

Dow Chemical is not the only seller to seek an increase in Brazil. Local producer Braskem is looking for an increase of R300/tonne for all grades of PE.

The measure seeks to restore margins lost because of the devaluation of the domestic currency in relation to the US dollar, although the reais has recovered some of its losses in the last week. The reais has lost about 10% of is value in relation to the dollar in the past month.

Prior to the July increase, low density PE (LDPE) prices in Brazil are at $2,420-2,510/tonne FOT (free on truck), while linear low density (LLDPE) butene levels are at $2,307-2,397/tonne FOT. High density polyethylene (HDPE) blow moulding grades are at $2,329-2,465/tonne FOT, according to ICIS data.

It is not clear how much of the increase will see actual implementation. Negotiations with buyers tend to reduce the size of the hike.  

Assessed Brazilian PE prices include the PIS/Cofins taxes, which add approximately 9.25% to the price or more, depending on product destination.

($1 = €0.77; $1 = R2.24)

By: George Martin
+1 713 525 2653

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