Participants in Mexican chemical event see rising prices due to freight markup from Asia

Market participants in the Mexican polyurethane, polyols, and plasticizers industry are observing rising prices for materials of Asian origin, as freight rates have been experiencing a significant increase in recent weeks. Additionally, as US producers seek price increases, sources shared expectations of an upward price adjustment in Mexico in the coming weeks.

During the UTECH Las Americas 2025 event in Mexico City held from June 4 to June 6, a supplier said that different factors have been affecting pricing. In their opinion, logistics from China is a key issue, as it has increased in complexity over the past few weeks.

Similarly, an importer mentioned that this issue, coupled with rising freight rates, could eventually impact polyurethane pricing.

"The price hasn't risen yet, but the next deliveries from China might arrive above freight costs," the source said.

The importer added that it is unclear if increases would only apply to freight costs or if material would also be more expensive.

"Producers did something similar 2-3 years ago, when transport costs rose, they also increased the price" of polyurethane, the importer added.

Platts, part of S&P Global Commodity Insights, assessed container rates from North Asia to East Coast North America at $7,400/FEU on June 9, a $900 week-over-week increase and $4,000 more than a month prior.

The markup for freight from Asia has not tempered the animosity of some Mexican market participants toward overly competitive material from overseas.

"Asia is the one setting the price here," said a polyurethane distributor source attending the event.

"They almost give it away; it almost feels they are producing it on the ship. Chinese companies are destroying the added value when one tries to create a better product," the same source added.

However, product from other regions seems unlikely to take the place of Chinese polyurethane, even with the increased freight costs. The importer source said that, even though prices for Asia-origin material have risen across the board, product from the US has also increased by 3%-4%.

Similar pressures for upstream

Polyurethane feedstocks are also facing upward price pressures due to trade uncertainties. According to sources, pricing in the US has already been experiencing swings. While prices for TDI originating from Asia have not been significantly affected yet, an upward trend could be seen soon.

Another supplier attending UTECH concurred, stating that prices for polyols and isocyanates have fluctuated due to changes in freight costs and tariffs. However, they also noted that the market is awaiting the outcome of producers' initiatives to raise prices. As a result, import markets like Mexico are adopting a 'wait and see' approach.

"No one welcomes rising prices, and buyers aim to keep prices stable throughout the year. However, it is common to see two or three price adjustments during that period," a source mentioned regarding the feasibility of rising prices in the polyols and TDI markets.

On the month, US exports of Polyols (TDI) to Mexico increased 33% in April, totaling 3,394 mt, according to US International Trade Commission data released on June 9. For two consecutive months, exports have shown an upward trend as they recover from a sharp decline in February, which was marked by the onset of the tariff conflict.

Platts is part of S&P Global Commodity Insights.