VINACHEM

Higher freight costs and China’s bullish prices of polyethylene terephthalate (PET) resin may be preventing deliveries of Asian resin into Latin America, sources said on the sidelines of PLASTIMAGEN MEXICO 2019.

Central and South American buyers of Asian resin had benefited from reduced PET prices in March as free cargo space due to the US-China tariff war resulted in lower freight costs whose savings were passed on to the buyers. However, freight costs started to head up, almost doubling in price from $40/tonne to $75/tonne.

Additionally, China’s PET offers carried on a bullishness noted since mid-March, citing higher feedstock costs.

“Three Central American buyers of Taiwanese resin have been expecting their product in vain. Their shipments have not arrived,” the source added.

Sources speculate that the Asian producer may be waiting for the bullish price trend initiated by China to take hold and for freight costs to stabilise in order to renegotiate prices for the previously committed cargoes.

If this is indeed the reason behind the delay, Central American buyers may be better off purchasing Mexican product, which has been offered at attractive prices and can be delivered in much shorter periods of time than Asian product.

Availability of Mexican product in Central and South America has been ample as resin plants in the country are said to be running at 100% of capacity, amid sluggish domestic demand.

Prices of Asian resin for export were heard at $1,090-1,150/tonne FOB (free on board) China and Taiwan.