Controversial inflation figures were released with official data showing 7.7 percent, while independent analysts’ estimates were around 15 percent. The U.S. dollar remains virtually flat against the local currency. Output of polyolefins remains high with improved demand in the first half of the month of January. Offers from overseas suppliers seem to have diminished. PE prices increased in the second half of January, as expected.

Braskem-Quattor deal was announced in late January. The Comperj project may face changes. High exports characterized the latest month of 2009 for petrochemical companies, which helped them to reduce inventories. Quattor ethane/propane cracker in Rio de Janeiro continues to operate at low rates. Domestic sales for petrochemical companies do not seem to have lost steam this January. Demand at distributors appears to have slowed due to inventories adjustments. Prices of petrochemical feedstock remained in an upward trend. Polyethylene and polypropylene prices have been flat in the first half of the month while PS, PVC and PET are already more expensive.

Demand has recovered slightly in January as inventory levels were low to begin the year. Limited supply of film PE resins has affected prices in Mexico. U.S. Gulf producers announced price increases for January, and most of these were implemented due to production problems and higher raw material costs that increased production costs for most petrochemicals. The exchange rate strengthened slightly, helping to lower risks when importing product. China’s strong demand in early January helped push prices up and made product less available from imports. With China’s slowdown in demand due to their Lunar New Year holiday, prices flattened out at a higher level for mid January.

Another setback in the U.S. economic recovery was the disappointing reading of unemployment rates in early January. December numbers clung to the double digits with no easing in jobless claims. On the energy side, the NYMEX futures contract for February delivery at the Henry Hub settled at US$ 5.73 per MMBtu. Extremely cool weather across the United States during early January put upward pressure on natural gas prices. Natural gas in storage was reported at 2,852 billion cubic feet (Bcf) – about 4.4 percent above the 5-year (2005-2009) average. The spot price for West Texas Intermediate (WTI) crude oil increased to US$78 per barrel or US$13.7 per MMBtu. Higher feedstock prices will indeed put upward pressure on prices during January.