By John Richardson
THE hard numbers, in the chart above, support anecdotal evidence we have been picking up for over a month of increased Asian polyethylene (PE) exports to Brazil and other Latin American countries.
It also confirms reports that Middle East producers are raising shipments to the region.
This includes one major player that is said to have established a distribution hub in Brazil. The hub involves cargoes being shipped from the Middle East, stored there and then sold. This avoids long delivery periods for buyers, during which pricing can fluctuate several times.
The South Koreans and the Saudis have, in particular, raised their exports to Latin America in response to a weak China market, say several polyolefin industry sources.
This has occurred at the expense of the North American Free Trade Agreement (NAFTA) producers, particularly those in the US, as the above chart - from Global Trade Information Services - illustrates.
US producers have had an excellent first quarter thanks to record-low natural gas prices, restocking by buyers after heavy inventory depletion in Q4 last year, and cracker turnarounds.
But buyers, sitting on comfortable stocks, have described first-quarter demand as relatively weak and are resisting further price hikes.
Add this resistance to what is likely to be a continuing weak export performance and the second quarter looks set to be a great deal worse for the US.