en.Wedoany.com Reported, São Paulo (ICIS) – The chemical and petrochemical industry in Latin America is facing a cost shock recently, with Brazil's packaging industry sounding the alarm over tight polyethylene (PE) resin supply. Dow Chemical is seeking a $340 per ton price increase for PE in Latin America, bringing the cumulative increase to approximately $1,000 per ton in a short period.
The Brazilian Flexible Plastic Packaging Industry Association (Abief) stated that the rise in PE prices is concerning, as PE plays a core role in the packaging value chain. Abiquim, the Brazilian trade organization representing chemical producers, noted that rising petrochemical and fertilizer prices are a major concern, but member companies remain operational.
Braskem expects petrochemical spreads to jump nearly 50% in the second quarter compared to the first quarter, with a greater impact on Asian producers. Braskem's recent financial results showed operational pressure, with its stock falling nearly 12%.
Mexico has approved provisional anti-dumping duties of $631.50 per ton on suspension polyvinyl chloride (PVC) imported from the United States, with the measures to last for four months. Data from Mexico's National Institute of Statistics and Geography (Inegi) shows that the economic activity index fell 0.9% month-on-month in January, with output in the petrochemical-intensive manufacturing sector declining 3.0%.
Argentina's economy grew 1.9% year-on-year in January, driven by fisheries and agriculture. Analysts at BTG Pactual said investor sentiment towards Argentina is positive, but fertilizer cost pressures are increasing. Argentina imports 60% to 80% of the fertilizer it consumes, and global supply chain disruptions could push prices higher.
Diverging central bank policies in Latin America: Mexico's central bank cut its interest rate to 6.75%, Brazil's to 14.75%, Chile's held steady at 4.50%, and Colombia may raise rates to 11%. Capital Economics expects overall inflation this year to be about 0.5 percentage points higher than previously forecast.
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