Argentine PVC market clouded in uncertainty after plummeting peso

23 January 2014 21:38 Source:ICIS News

HOUSTON (ICIS)--Argentina’s polyvinyl chloride (PVC) market is operating under a cloud of uncertainty after the currency devaluation, sources said on Thursday.

The Argentine currency fell to 7.75 to the US dollar on Thursday, marking a decline of 12% in the past two days in the currency's worst performance since the aftermath of the 2001 economic crisis.

Some sources said that resin sales have been suspended until the currency situation is clarified.

When sales are resumed, payment terms will be shortened to a maximum of 15 days to maintain transactions in Argentine pesos, according to local industry participants.

Otherwise, payments will be adjusted to the exchange rate on the payment due date, the sources added.

Contributing to the absence of clarity in the plastics resins markets in Argentina, other sources suggested that resin sales could not be suspended, because market participants are concerned about government oversight. Although there is no official government control on sales prices, sellers might feel obligated to sell raw material as long as product is available.

Additional reporting by Al Greenwood

By Ron Coifman