Brazil's annual Carnival celebrations are bringing activity in the country's polymers market to a virtual standstill while giving buyers time to wait out better prices, US and South American sources said this week.
"Last week's [import] pricing levels are the highest anybody can do business at this week in Brazil," a US-based trader said Wednesday. "There's no way to pass along any [US export] increases [this week] because of low demand due to Carnival."
Market activity is just as quiet on the domestic front following a month of price increase negotiations between local producer Braskem and Brazilian buyers.
"The market is completely dead and you're not going to see any major movements in domestic pricing unless something big happens with the Real or US export pricing rises dramatically this week," a Brazilian-based converter said. "Pricing from last week would still work in the market this week if anyone really needed resin."
Some buyers in Brazil and Mercosur have been anticipating another round of increases from Braskem in March, although all who do say it would need to be tied to rising prices in the US and other key export regions or rapid devaluation of the Real.
And while traders in the US have said they expect pricing to firm to start March, recent drops in Asian pricing could give Latin American importers another option while simultaneously applying downward pressure on the US, sources said.
Wednesday saw Asian import PE spot pricing fall for the second straight week amid steady drops in the Asian futures market, with spot-market losses ranging from $30-$100/mt CFR Far East Asia basis, according to S&P Global Platts data.
Shipping rates from the Far East to South America are also starting to return to normal levels after being talked too high for the last several months, sources said this week.
"Asia pricing dropping could limit US exporters raising prices, regardless of domestic US trends or movements," a regional trader said, adding that the Far East could also serve as an option for South American imports when market activity resumes next week.
Platts on Wednesday assessed Brazilian import and export pricing as stable week on week. Domestic Brazilian PE was also assessed by Platts as stable on Wednesday.
In Brazilian import assessments, LDPE was at $1,410/mt; LLDPE was at $1,305; HDPE film was at $1,295/mt; HDPE blowmolding and injection were at $1,275/mt; PP homopolymer was at $1,250/mt; PP copolymer was at $1,295/mt; and PVC was at $965/mt. All assessments were made Wednesday on a CFR Brazil basis.
In Brazilian export assessments, LDPE was at $1,400/mt; LLDPE was at $1,280/mt; HDPE film was at $1,200/mt; HDPE blowmolding and injection were at $1,240/mt; PP homopolymer was at $1,210/mt; and PP copolymer was at $1,220/mt. All assessments were made on an FOT Brazil basis for delivery by truck to Mercosur markets.
In domestic Brazilian assessments, LDPE was at Real 6,125/mt; LLDPE was at Real 5,625/mt; and all three grades of HDPE were at Real 5,575/mt. All assessments were made on a delivered Sao Paulo basis.
