PE: falling prices in Latin America

Chain reaction to low world per-barrel oil and the increase in this year's production of resin in the U.S. Gulf, prices of polyethylene (PE) entered in fall in Latin America, notes the analyst George Martin in an article posted on the British site Icis , specialized in the monitoring of chemical and petrochemical industries. Other weight in favor of the decline in the share price of resin in the region, it fits, is the impact of the appreciation of the dollar on local currencies, a concussion noticed particularly in Argentina, where the peso has accused strong vulnerability before the American currency. In Mexico, Martin, the primary obstacle has been the proliferation of PE for us producers, the shade of the Nafta tariff exemptions, exacerbated by increased domestic production of resin. According to an analyst at Icis, the expansion set three years ago with the operation of the Ethylene XXI complex, which has the brazilian Braskem as majority stockholder, combined imports of ethane made by State-owned Pemex to reactivate your production of 35,000 tons/month of PE. As a result of oversupply, tie the ends Martin, resin prices in Mexico are falling back gradually. In Brazil, for your part, specifies the writer, Braskem, only producer of polyolefins in the country, has reduced prices of PE in November and December, to stop the increase of imports. "In Argentina, 48% inflation and interest rates in the range of 60% reduced this year the demand for plastic resins, but prices retreated a lot," he notes. "The Dow (only producer of PE) has been less prone to charge prices lower than those of resin Braskem in Brazil". From another angle, Martin, logistics also complicates the scenario for the South American market polyolefin with reducing the amount of transport ships in the region. Most of the countries on the Pacific coast, the writer of the Icis, the example of Colombia, Ecuador, Peru and Chile, operating with zero or minimal import tariffs, in contrast with the high rates in Brazil and Argentina, and have witnessed the unloading of PE decreasing prices. "The situation raises the pressure on producers of PE in South America, now committed to preserve your market share", considers Martin.