PLASTIMAGEN ’19: US PE can be costly for Mexico despite expanded capacity

Lane Kelley

05-Apr-2019

MEXICO CITY (ICIS)–A huge US build-up in polyolefins capacity in recent years has increased the availability of American polyethylene (PE), but a purchasing manager for a polymer firm based in Mexico City says the gain has not resulted in lower import prices but at times, surprisingly high costs.

Isabel Cardona, purchasing manager for Polimeros Mexicanos, said she buys around 6,500 tonnes/month of low density PE (LDPE).

Speaking on the sideline of PLASTIMAGEN MEXICO 2019, Cardona said what makes her job tough is that she buys the rotomoulding grade, a fairly rare grade used for making hollow plastic parts, such as tubes, balls and many toys.

Cardona said she buys rotomoulding grade LDPE from a Mexican producer on contract, but it usually leaves her short.

“My main problem is finding enough material, always,” Cardona said.

That often brings her to shopping for material from a few US producers who sell rotomoulding grade. Cardona said she always buys spot.

“None of them will put me on contract,” she said. She added that the Mexico price is usually a few pennies lower than that of the US producers.

“If they do have it for export,” Cardona said of the US producers’ price, “it’s not a bad increase, say 3 or 4 cents (per lb) higher.”

As an example, Cardona cited material priced at 44 cents/lb by the Mexican producer and in the high 40s cents/lb by US sellers.

Cardona said the costlier problem comes when she has reached her limit on contract with Mexico, and the US producers do not have export LDPE rotomoulding grades to sell.

Producers, after all, generally export what they cannot sell domestically. At that point, Cardona said the American companies tell her they can only sell it to her if she pays domestic US prices.

“But then I have to pay 30 cents (per lb) more,” she said. Cardona said she recently bought a railcar load of LDPE at that price increase. Cardona said she has not paid that much very often, but only when she cannot get the material anywhere else.

“My main problem is always finding enough material, and sometimes I pay dearly for it,” Cardona said.

PLASTIMAGEN MEXICO 2019 takes place on 2-5 April in Mexico City, Mexico.

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