Polymer import prices likely to fall in South American Pacific Coast markets on flooding

26-Apr-17

Polymer import spot prices are expected to continue to fall in some key South American Pacific Coast markets affected by record-setting flooding in March and April, as per regional sources in Platts. Demand for polyethylene and polypropylene in Peru and Colombia was being depressed by high inventories, a regional trader said. Many converters and end-users have shut down since flooding and mudslides began in March, leaving those whose facilities were spared with plenty of resin, the source added. The severe weather and its aftermath, which is being felt in northern Peru and southern Colombia more than in other Pacific Coast markets, has also wreaked havoc on regional infrastructure and logistics.

The prospects of being unable to transport resin from the ports to production facilities has led some traders and importers to lower offer levels for on-the-water cargoes, the source said. Customers with unaffected warehouses at or near the ports are being targeted as sellers are looking to avoid having to pay for storage or docking while waiting to make a sale, the source said. Lower offers have done little to spur buying as customers still active in the market are anticipating even more price reductions through the end of April and into May, the source said. Even where there is demand and buying interest, issues with transportation are still delaying deals or preventing them all together, a regional producer source said. Since reaching 2017 highs in early to mid-March, spot import prices for all grades of PE and PP have been on a slow and steady decline.