Lawmakers have approved the nationalization of Repsol-YPF, the largest oil and gas company in the country -- the Senate in late April and the Chamber of Deputies in early May. Polls have shown the decision was backed by most Argentines. Industrial activity remains sluggish. Production at principal petrochemical sites is healthy, while demand remains weaker than normal. Prices went up in April and may remain high for May deliveries.

Industrial production remains sluggish, and the administration is announcing a new round of stimulus initiatives. The real depreciated in April and is still losing to the dollar in early May. Operational rates at Braskem’s crackers remain high. The company began operations at its new suspension PVC plant in Marechal Deodoro in Alagoas state in April. Prices of naphtha continued their rise for May deliveries. Resins prices jumped in April, and we should see additional price hikes in May set in the local currency. This is mostly due to the depreciation of the real. Demand was weak in April and remains low in early May.

With the first debate over, the presidential race is heating up in Mexico. In Mexico, most resin sales were sourced from inventory rather than direct purchase orders to producers. Buyers in April reported lower demand downstream, and providers noted difficulty in selling at any price. On the supply side, product availability in April has been adequate. However, plant maintenance planned for May has not affected supply, and buyers continue to expect lower prices this month. In February and March, price trends were clearly headed upward. Today we are certain that trends have changed direction, and we expect to see lower prices for most products. There is a general consensus that prices are likely to take a downward turn in early May. However, selected companies are hesitant to announce prices for delivery this month. Product availability will be the key to defining price trend in May. Pemex has postponed the program of plant maintenance it scheduled for May; therefore, product should be readily available this May. In Mexico, inventory levels at convertors’ plants are low, and buying will be necessary in the coming weeks. However, individual sales volumes will be smaller, and the frequency of purchase orders will increase. Buyers will need to return to market for additional volume around mid-May. We expect to see U.S. Gulf Coast suppliers synchronize production. Demand will dictate operating rates in May and June, and this could create reduced supply for certain grades of resins in late June. The Mexican peso has stabilized at around 13.1 to the U.S. dollar.

The presidential campaign continues to take center stage, as Republican leaders rallied behind presidential candidate Mitt Romney, and President Barack Obama officially began his re-election campaign in Ohio and Virginia. Unemployment rates continue to fall as the economy struggles to recover. A slightly lower unemployment rate was reported for April. President Obama is aiming for a 7.5% unemployment rate in the hopes of giving his re-election bid a significant boost. U.S. GDP grew by 2.2% in Q1 2012. Natural gas prices at the Henry Hub reached US$2.09 per million Btu (MMBtu). At the NYMEX, future contracts for June delivery are now reported at US$2.29 per MMBtu. Underground storage was at 2,576 billion cubic feet (Bcf). The West Texas Intermediate crude oil spot price was US$104.89 per barrel (US$18.08 per MMBtu).