APLA ´08: US woes hurt petchem demand in Mexico

16 November 2008 18:31  [Source: ICIS news]

RIO DE JANEIRO (ICIS news)--The slowdown in the US economy is increasingly being felt in Mexico where demand for petrochemicals has dropped due to weaker consumer spending north of the border, a Mexican consultant said on Sunday.

The impact on the Mexican auto industry is significant and that means trouble for local petrochemical makers, the consultant said on the sidelines of the Latin American Petrochemical Annual Meeting (APLA) in Rio de Janeiro.

“Some [automobile] plants have reduced rates or halted production altogether because of a drop in exports to the US,” the source said.

The recent slump in crude oil prices has also left Mexico in dire straits, the consultant said, adding that Mexico relies on crude oil exports for 40% of its revenues.

Mexican oil production is also declining and that means even less cash for government coffers, the source said.

The consultant said the magnitude of the latest financial crisis is unprecedented for the petrochemical industry.

“There is a lot of uncertainty and things could get worse, particularly for Mexico” he said, alluding to the significant amount of trade Mexico does with the US.

The 28th edition of APLA opens on Sunday at the Sofitel Hotel. The conference ends on Tuesday.

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