31 December 2007 19:00 [Source: ICIS news]
By George Martin
HOUSTON (ICIS news)--Concerns over the supply of feedstock will remain a potent obstacle to growth in Latin America’s polypropylene (PP) markets in 2008 and beyond, industry sources said.
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Another factor holding back new projects is an energy shortage which is expected to return in 2008 because there are no investments to produce a lasting solution in this field.
Brazilian markets are poised to gain from this situation and will incorporate new production in 2008 from Petroquimica Paulinia’s 300,000-350,000 tonne/year plant in
Brazilian producers have succeeded in establishing high PP prices in their domestic market, but they also claim that their costs are higher due to
At the same time PP imports from all over the world have acted as a moderator of prices in the country. US PP exports are landing in
Brazilian producers keep an eye on import statistics to assess the severity of the problem and take action accordingly, an industry source said.
Production of PP in
Petroquim has plans to build a 150,000 tonnes/year PP facility in
Chilean PP imports from the US Gulf have increased in 2007, according to official US trade data, displacing products from Asia, and this pattern is expected to continue in early 2008, according to market sources.
Propilco has begun production at a new propane/propylene splitter that is intended to reduce the Colombian PP producer's dependence on imported raw materials. The company expects to supply 30% of their needs with the new unit.
By 2009, the company expects to increase PP capacity to 500,000 tonnes/year according to Propilco officials.
Venezuelan consumption of PP has increased, forcing local producers to reduce or eliminate exports to keep up with domestic demand into 2008. There are plans by Venezuelan state producer Pequiven and
In North America,
This production may displace some volumes from the US currently going into Mexico, and will likely put pressure on domestic and regional prices.
The North American Free Trade Agreement (NAFTA) has made
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