Resin offers from Asia to Latin America could push producers to reduce polyethylene and polypropylene offers for June, market sources said Monday.
A source at Brazilian producer Braskem said the company could drop polyethylene offers next month to improve demand and better compete with the international market.
"We are still studying a possible offer price reduction, mainly on LDPE for Mercosur (Paraguay, Uruguay and Bolivia) because we know offers coming from Asia are cheaper, and we lost some deals because of that," the source said.
In early May, Braskem increased polyethylene offers to Paraguay, Uruguay and Bolivia by $100/mt and polypropylene by $150/mt. The hikes put Brazilian PE offers at $1,800/mt CFR for HDPE injection, blowmolding and film, $1,800/mt CFR for LLDPE butene and at $1,900/mt CFR for hexene. LDPE offers were herd at $2,250/mt CFR.
By contrast, Asian PE offers to Latin America were heard lower at $1,640/mt CFR for HDPE blowmolding and $1,850/mt CFR for LDPE film.
While Braskem did not anticipate lowering polypropylene offers in June, other Latin American producers have hinted prices would be coming down as well. A Colombian polypropylene distributor in Central America, for example, said it was almost impossible to compete with Asian prices during May.
"The Colombian offers were too high, in certain cases more than $300/mt more than the Asia ones," the distributor said. "Demand for Colombian PP in Central America went down dramatically, but we heard the offers are going to go down very soon."
A substantial drop in PP demand was also seen in Paraguay, where a distributor of Brazilian resin said it should close the month with 50% less demand than April because of the high prices.
To illustrate the difference in pricing levels, offers from South Korea to Latin America were heard at $1,870/mt CFR for homo raffia, $1,870/mt CFR for homo injection.
By contrast, Brazilian offers to Paraguay, Uruguay and Bolivia during May were much higher at $2,050/mt CFR for homo raffia, $2,080/mt CFR for injection and film and at $2,150/mt CFR for co-polymer.
Colombian offers to Central America, meanwhile, were around $2,240/mt CIP for homo raffia, $2,270/mt CIP for homo film and at $2,320/mt CIP for co-polymer impact, levels that made them almost impossible to compete against Asian imports.
