The nation is embroiled in controversy over President Cristina Kirchner’s incorrect cancer diagnosis. Meanwhile, the economy seems to be cooler than in previous months. Producers’ inventories are healthy, and supply is abundant. Seasonal demand is gone and may only regain momentum in March. Prices set by producers were virtually steady; however, distributors cut prices for January deliveries.

Economic performance in 2011 was worse than previously expected, and industry felt the brunt of the slowdown. Braskem’s naphtha crackers in Camcari are once again running normally, but the company’s units in Triunfo are facing a short-lived operational issue. Naphtha prices have been flat in January compared to December, while prices of some intermediates fell. Polyethylenes inched higher, while other resins remained flat for January deliveries. Demand for most resins is slow at this time of the year, and attractive offers from abroad are ubiquitous. A government stimulus aimed at household appliances has made PS an exception to this trend. High seasonal demand for disposable items is driving PS sales.

Trade activity picked up in the second week of January, as purchase orders began to enter the market. In most cases, buyers reported price increases above December levels. There is a general consensus that prices will take a slight upward turn in early 2012. There is also a widening in the price range. In February, more homogenous pricing should develop in the market. PE prices seem firmer than PP prices. PE demand is good and should pick up in the second half of January. Buyers began the year entering the market with minimum inventory volumes and are now trying to replace inventory with new volume. Product availability will be the key to defining price trend in January and February. At facilities along the U.S. Gulf Coast, inventory levels are low, and plant maintenance should help sync production levels to demand. The Mexican peso has somewhat stabilized around 13.6 to the U.S. dollar. Pemex announced a price increase of 3.5% for all PE resins in early January. PVC prices are also trending upward, while PET prices are weakening. PS prices are firming, and the price differential between HIPS and GPPS continues to widen. Current economic developments in the United States lead us to believe that demand may improve some in early 2012.

The best news for the U.S. economy is the emergence of lower unemployment rates and higher consumer confidence. This economy seems to be headed in the right direction. U.S. presidential elections will dominate the investment environment as well as demand in 2012. High uncertainty levels in global geopolitics will continue to affect energy prices and reflect on demand. The U.S. GDP grew only 1.8% in Q3. Still far from healthy, unemployment rates have begun to exhibit genuine improvement. Crude oil prices continue to firm, and natural gas prices at the Henry Hub reached US$2.97 per million Btu (MMBtu). At the NYMEX, future contracts for February delivery are now reported at US$2.94 per MMBtu. As of January 06, underground storage was at 3,377 billion cubic feet (Bcf). The West Texas Intermediate crude oil spot price was US$102.24 per barrel, or its natural gas value equivalent of US$17.63 per MMBtu.