Dow Chemical to increase August PE prices in Brazil

19 July 2013 18:07  [Source: ICIS news]

HOUSTON (ICIS)--Dow Brazil has notified its customers that starting 1 August the price of polyethylene (PE) resins will be increased by Brazilian reais (R) 150/tonne ($67/tonne, €51/tonne), a company source said on Friday.

The August increase is in addition to the increases posted in May and June for a combined amount of R500/tonne.

No justification was specified in the letter sent to customers, but the underlying cause of recent increases has been the devaluation of the reais versus the US dollar and the increase in the price of petrochemical naphtha – a direct consequence of rising crude oil prices in international markets.

Resin producers who must buy raw materials in US dollars have seen their margins deteriorate in the last couple of months, when the currency exchange went from R2.00 to about R2.30 per dollar. On Friday, the exchange rate was at R2.24.

Current low density polyethylene (LDPE) prices in Brazil are at $2,492-2,580/tonne FOT (free on truck); linear low density polyethylene (LLDPE) is at $2,381-2,470/tonne FOT; and high density polyethylene (HDPE) blow moulding is at $2,403-2,536/tonne FOT, according to ICIS data.

Price assessments in Brazil include the PIS/Cofins taxes, which add 9.25% to the price.

($1 = €0.76; $1 = R2.24)

By: George Martin
+1 713 525 2653

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