Mexican EPS producers insist on September price increases

24 September 2013 22:19  [Source: ICIS news]

HOUSTON (ICIS)--Unlike US counterparts that recently postponed planned price increases, Mexican expandable polystyrene (EPS) producers Polioles and Polidesa have insisted on getting a minimum 2 cent/lb ($44/tonne, €33/tonne) increase for September, market sources said Tuesday.

“In Mexico the increase of between 2 cent/lb to 3 cent/lb since 15 September is being implemented, with just a few exceptions where that increase went to October,” one source close to the selling side said.

“The argument that demand is low is not really a factor in whether or not to adjust EPS prices. Pricing here simply reflects changes in costs, as the industry has very small margins,” the source added.

Another source familiar to a second producer in Mexico said that it is also trying to push forward a similar price increase, effective for deliveries in September, because “feedstock prices did not go down”.

While one of the sources said that the demand situation to push forward the increases is not ideal due to depressed construction activity, another said that demand from the packaging side has been strong this month.

Sources from the buy side in Mexico have said that they are surprised about the efforts by the two producers in the country to push increases amid weak demand.

The two main producers of EPS in Mexico, Polidesa and Polioles, continue to push for the September increases in their domestic market even as in the neighbouring US all EPS producers announced in mid-September that their plans to raise prices by 3 cent/lb this month were being pushed to October because of actions in the market related to competitive dynamics.

One buying source in the US said that it was really the threat of Asian imports that helped keep US EPS prices in check.

One source has said that Mexican producers are better protected from Asian imports thanks to relatively high customs duties. Another source in the US said that “the supply basis is much narrower” in Mexico with just two plants.

($1 = €0.74)

By: Renzo Pipoli
+1 713 525 2653

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