Low PE, PP prices from Asian suppliers might drive Braskem to reconsider July pricing on resin for domestic market, sources say; Asian prices down 700-800/tonne reais in June to 4,000 reais/tonne

Alison Gallant

Alison Gallant

Jun 21, 2011 – Industry Intelligence

LOS ANGELES , June 20, 2011 () – Low polyethylene and polypropylene prices from Asian suppliers might make Brazil's Braskem SA reconsider pricing on resin for the domestic market in July, industry sources said June 14, Platts reported the same day.

June’s prices for PE and PP were a rollover from May, Braskem said. If demand from China continues to remain low and Asian suppliers keep prices low, Braskem must assess their own prices for next month, a Braskem source said.

The Brazilian-based company’s June prices for PE for the domestic market were quoted at 4,700 reais/tonne (US$2,943.02/tonne) free on truck (with PIS/COFINS) for low-density PE film, 4,350 reais/tonne FOT for high-density PE blowmolding and 4,400 reais/tonne for HDPE injection and film.

Prices from Asian suppliers for the Brazilian market in June dropped by 700-800 reais/tonne to 4,000 reais/tonne free on board with all taxes and freight to the port, 3,250 reais/tonne FOB for HDPE blowmolding, 3,350 reais/tonne FOB for linear LDPE butene with all taxes and freight.

From Asia to Brazil, shipping time was 45 days, Platts reported.

Asian demand was rumored to be picking up this week, according to a source, and if that comes to fruition, Asian pricing could also go up for July. At the moment, however, the market is unpredictable, the source added.

Prices from U.S. suppliers are still very high, leaving Asia with the best PE prices in the market currently, the source said.

In the first week of the month, contract prices between Asia and Brazil were assessed at 4,180 reais/tonne for LLDPE butene, cost and freight and all taxes, 4,150 reais/tonne CFR for HDPE film, with all taxes.

In comparison to Asian prices to Brazil in June, U.S. prices were at a minimum $250/tonne more. Asian prices were at $1,800/tonne CFR for HDPE film and at $1,700/tonne CFR for HDPE blowmolding and injection, Platts reported.

The primary source of this article is Platts, New York, New York, June 14, 2011.

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