10 March 2014 15:25 [Source: ICIS news]
HOUSTON (ICIS)--Mexico’s sole polyethylene (PE) producer Pemex reduced prices for all grades effective on 7 March, to gain competitiveness on increased supply conditions, producer sources said on Monday.
The increase varied slightly among grades, amounting to 4.5% for linear low density PE (LLDPE) and high density polyethylene (HDPE) for injection applications.
Pemex reduced prices of HDPE blow moulding grade and low density polyethylene (LDPE) grades by only 4%, according to distributor data.
The reduction comes on the realisation that higher-than-usual volumes of imported PE entered Mexico during January, and the market appears oversupplied.
Braskem-Idesa continues its pre-marketing campaign and it is bringing about 8,000 tonnes/month into Mexico.
Overall, Mexico has received in January about 25,000 tonnes of PE in excess of the monthly average, estimated at about 40,000 tonnes/month.
The combination of oversupply conditions and weak demand in the first quarter of the year has created conditions conducive to a price decline, the source said.
The Mexican economy has been soft so far this year and this has been attributed in part to tax increases and delays in implementation of government investments.
However, some importers of PE product are still looking to increase prices in March by 2-3 cents/lb because steep increases announced for April suggest that there is still room for another increase in March.
Consumers are voting with their purchases and have decided to sit on their wallets, particularly because ethylene prices have not gone up.
PE supply is still considered tight in US markets, where adverse weather conditions have affected logistics, but Mexico is showing a different picture.
Prior to this reduction, Mexico’s domestic LDPE prices were at $1,669-1,819/tonne FOT (free on truck), while LLDPE prices were in the range of $1,465-1,668/tonne, according to ICIS data.
HDPE blow moulding prices were at $1,554-1,750/tonne FOT, according to ICIS data.
|ICIS news FREE TRIAL|
|Get access to breaking chemical news as it happens.|
|ICIS Global Petrochemical Index (IPEX)|
Asian Chemical Connections