HOUSTON (ICIS)--Argentina’s main domestic producer, Pampa Energia, increased the price of all grades of polystyrene (PS) by 6% effective 11 March, the second increase this month, seller and buyer sources confirmed Friday.
On the first day of the month, Pampa Energia had increased prices by 2.5% to account for raw material prices. Then came a sudden surge in the value of the US dollar that triggered the second increase, applied in addition to the first one.
The increase is calculated in local currency. Market sources expected the hike because the US dollar has been climbing in recent days.
In addition to higher prices, there are shortages of milk products in the market that are shrinking demand for PS disposable products.
Spoke persons for the milk sector attribute the shortages to adverse climatic conditions in the production areas, namely, Santa Fe, Cordoba and Buenos Aires provinces. The shortages are expected to be solved in a few weeks.
Transformers continue to see slow demand from all sectors and see these increases as difficult to transfer to their customers.
The economy is constrained by inflation, high interest rates, high tariffs, export taxes and uncertainty in a year of presidential elections.
Salaries are not keeping up with inflation. The US dollar made another run in recent days surpassing the Ps42 level per dollar. The Central Bank of Argentina increased interest rates sharply to contain the dollar rise. The domestic currency recovery magnified the increase this week.
PS production continues at low operating rates, as the local producer keeps inventory at levels compatible with the existing low demand.
With the increase, general purpose polystyrene (GPPS) prices are in the range of $1,797-1,926/tonne, FOT basis. High impact polystyrene (HIPS) prices are about $50/tonne higher.Polystyrene prices are surging in Argentina because of higher raw materials and currency devaluation.