Chile’s PE, PP production could return in June

16 April 2010 18:22  [Source: ICIS news]

HOUSTON (ICIS news)--Chile’s local refiner ENAP was giving some indications that operations could resume in June, although it was not clear at what rate, an industry source said on Friday.

The restart of ENAP’s Talcahuano refinery is critical for polyethylene (PE) and polypropylene (PP) producers that depend on that plant to obtain raw materials.

Although Dow Chemical’s PE plant and Petroquim’s PP facility at Talcahuano suffered only minor damage from the earthquake that shook Chile on 27 February, the plants have been unable to resume production because of a lack of feedstock.

In the meantime, Chilean buyers had resorted to imports to cover needs, finding that regional volumes were also in short supply and too expensive.

Cracker problems in Argentina had curtailed PE production, leading to a decline in export volumes from there.

Some PP from Colombia went to Chile, but at elevated prices, a buyer said.

Imports from Brazil were also in short supply, feeding speculation about potential technical problems affecting polymer production in that country.

Domestic polymer prices in Chile, which are usually lower than those of other countries, have increased to international levels and higher after the earthquake.

Korean imports have surfaced as the most competitive for those who dare to risk price changes in the nearly 70 days it takes for shipments of Asian material to reach Chile, sources said.

A source with ENAP said that when production resumes, the biggest problem will be to displace such competitive imports.

($1 = €0.74)

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By: George Martin
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