Venezuela June PS nearly doubles based on official exchange rate

HOUSTON (ICIS)–Estizulia, Venezuela’s sole polystyrene (PS) producer, resumed operations after receiving feedstocks from Pequiven, but prices have skyrocketed again in terms of the official exchange, a source with Estizulia confirmed on Tuesday.

June prices for general purpose polystyrene (GPPS) were heard within the range of bolivares (Bs) 44.00-48.00/kg ($6,984-7,619/tonne) under the official excange rate of Bs6.30 per dollar. May material was assessed at Bs25.44-25.55/kg.

June prices for high impact polystyrene (HIPS) were quoted within the range of Bs48.00-52.00/kg. May prices for HIPS were at Bs27.83-27.93/kg.

These levels are more than three times higher than those heard in other markets.

However, price levels become cloudy because of the multiple exchange rates in the country. Three of them are sponsored by the government and the fourth is the black-market rate.

The other rates are the so-called SICAD-1 at about Bs11.70 and SICAD-2 at about Bs50.00. The black market rate is at Bs72.00-73.00.

The different rates are applied to purchases of different imported products. The official rate increasingly applies only to food and medicines, while the SICAD-1 and SICAD-2 rates are used for imports of less vital commodities, but there are no clear usage rules, market sources said.

Buyers receive a price in bolivares and can only guess which one of the three official rates applies to their purchase.

Transformers have not balked at the higher prices, understanding that the real price could be an outrage or a bargain depending on the exchange rate used. Instead, they are relieved to finally be receiving plastic resins to rebuild their depleted or near-depleted inventories.

Upon reception of the feedstocks, Estizulia has produced HIPS first and is now trying to rebuild GPPS stocks, exhausted after nearly three months of inactivity caused by lack of raw materials.

Another shipment of styrene monomer (SM) and butadiene rubber (BR) is expected to arrive in Venezuela shortly, suggesting that feedstock supply is going back to normal, although nobody knows for how long.

The Estizulia plant has previously stopped operations in past years for the same lack of raw materials experienced early this year. The government’s Pequiven is the designated supplier.