Argentine PS producer seeks 12-14% Feb hike on devalued peso

30 January 2014 20:28 Source:ICIS News

HOUSTON (ICIS)--Petrobras Energia, Argentina’s main polystyrene (PS) producer, is seeking a 12-14% price increase for all grades of the resin, effective on 1 February, a company source said on Thursday.

The steep increase is a consequence of a recent large devaluation of the local currency versus the US dollar.

Producers of commodity resins are scrambling to protect themselves, but the size of the price increases allowed by the government may not be enough for some of them.

Currently, general purpose polystyrene (GPPS) prices in Argentina are in the range of $2,314-2,461/ DEL (delivered), while high impact polystyrene (HIPS) prices are in the range of $2,445-2,615/tonne DEL, according to ICIS data.

With the devaluation, prices have lost in excess of $200/tonne in January alone.

Demand remains strong as buyers struggle to build up stocks ahead of the February increases.

Another important change is that the terms of sales will be cut in half. If a buyer was paying in 60 days, payment will now be due in 30 days.

The shortening of credit terms can put the February increase at about 15%.

At present, production is normal with good availability of all grades of PS, a producer source said.

Imports from Brazil are also sold in the country, but face higher hurdles as the government delays granting of import permits to prevent loss of hard currency.

The Petrobras Energia PS plant is located in Zarate, northwest of Buenos Aires, and has a nominal capacity of 66,000 tonnes/year.
By George Martin