Firming PVC price direction in Mexico on US initiatives

11 July 2014 23:38 Source:ICIS News

HOUSTON (ICIS)--Market sentiment in Mexico points to firming polyvinyl chloride (PVC) prices for August on US suppliers’ 2-3 cent/lb ($44-66/tonne) hike initiatives for next month, cracker operating issues in the US, and tight feedstock ethylene supply, sources said on Friday.

However, participants in Mexico are waiting for Taiwan’s Formosa Plastics Corp (FPC) to announce its benchmark offers for August, which could contribute to PVC market direction in other regions as well as in the Americas.

Commercial activity remains slow in Mexico because of fiscal regulations and restrictions on credit purchases, while consumers prefer to do business on a credit basis rather than in cash. Additionally, the government has limited spending on public projects, reducing demand for PVC.

PVC availability in Mexico is gauged as sufficient to meet tempered demand, according to local sources.

Pipe-grade PVC domestic prices in Mexico are assessed at $1,100-1,150/tonne DEL (delivered).

Mexichem is the PVC producer in Mexico.

By Ron Coifman