Editor Landon Feller, landon.feller@icis.com

Note: For full details on the criteria ICIS pricing uses in making these price assessments visit www.icispricing.com and click on “methodology”.

 NOMINATIONS:

Argentina:      September +$140/tonne; October + $35/tonne

Brazil:             September +$100/tonne

Colombia:       September +$0-20/tonne

Mexico:          September +$66/tonne

Polyethylene terephthalate (PET) prices were set to increase in most Latin American regions, although full confirmation from buyers and sellers was still pending during the week ended 8 September.

Market sources said most Argentine buyers’ prices would rise by the full $140/tonne increment sought for September.

Both the local seller and its customers were holding low inventories and would have to pass higher prices ahead of rising demand by early Q4, participants said.

Exports were flowing in recent weeks, further tightening the market and making price hikes likely.

The posted price, while expected to move up by around $130-140/tonne by mid-September, was left unchanged pending final confirmation.

Local seller Dak also intended to implement a $35/tonne hike in October, or whatever increment was necessary to realize a $170-180/tonne increase over the two-month period.

The story was different in Brazil. Buyers were pushing back against local producer M&G’s nominated increase of $100/tonne from 1 September. Recently falling resin offers in Asia were behind the softening price hike sentiment, although a full increase was still likely for all but the largest buyers, sources said.

A major consumer in Brazil said it expected to secure a September contract at $10-20/tonne below the nominated rate.

Market participants also said softer pricing out of Asia was likely to undermine additional price hike nominations for October.

Contrary to what buyers in Colombia previously predicted, local producer Enka said that it was unlikely to seek an increase during September because of flat-to-lower feedstock paraxylene (PX) contracts.

The producer said US PX contracts remained in negotiation. Rollovers were seen in Asia and Europe, and US spot prices were already falling.

This combined with weaker demand at the end of northern summer months to make higher PET values unlikely, the seller said. Operating rates were already very low and export requirements had been cut in Venezuela and Ecuador.

While import prices to Venezuela were considered steady at posted rates, sources said the values that buyers were paying to secure and move resin within the country were up to three times higher due to restrictions on US currency within Venezuela.

Multinational buyers were using their funds in other regions to secure volumes within Venezuela, a source in the region said, but supply was still very tight.

In Mexico, no confirmation of the 3 cent/lb nominated price hikes was heard during the week as sources were either unavailable or unwilling to comment.

Some sources had previously said the full September price increase would not pass because of an expected rollover in feedstock PX. Sellers noted that implemented increases to date had not covered the impact of raw material cost increases during the hottest months of 2009.

Although many participants with knowledge of the issue agreed that earlier raw material costs justified the hike, some said only 2 cents/lb would be implemented in September.

Softer demand could undermine the full increment, buyers said. Sellers countered that exports to the US tightened supply at a time when many consumers managed lower-than-usual inventories.

A US producer estimated that 18,000 tonnes/month of Mexican PET resin was moving into the US on average during 2009.

Import prices in Chile were assessed higher by $20/tonne on the back of stronger Asian resin pricing during July. Current offers for delivery in late October or early November were at $1,230-1,270/tonne CFR Chile.

This week on ICIS news ( www.icis.com ):

08-Sep-09 19:29 US petchem plants storm-free as hurricane season enters peak

08-Sep-09 19:11 Mexico appoints new Pemex head, seeks increased oil output

04-Sep-09 22:26 Brazil Aug flex-fuel vehicle sales jump 10% year over year

04-Sep-09 17:57 INSIGHT: Prepared for disappointment in 2010?

02-Sep-09 19:22 US PX contracts appear headed downward for September

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