PE and PP market growth in Latin America may slow down - consultant

29 June 2011 01:37  [Source: ICIS news]

BUENOS AIRES, Argentina (ICIS)--Latin American polyethylene (PE) and polypropylene (PP) demand will continue to grow in 2011 but that growth may decelerate, an industry consultant said on Tuesday.

“Emerging countries including Latin American nations, are leading the GPD global growth. However, everything suggests that this growth in countries such as Argentina, Brazil, Chile and Colombia will decelerate soon,” said Jorge Buhler, director of Polyolefins Consulting. He spoke at the Plasticos 2011 plastics industry conference in Buenos Aires.

“Even so, PE and PP demand in Latin America will continue to grow in 2011 at similar rates as last year,” he said.

Buhler said, Latin America - not including Mexico - represented 6% of the global demand for PE in 2010 and about 5% of the global demand for PP. The continent holds 5% of the global nameplate capacity for each of these products.

Regarding production, “there was a process of concentration in America for PE and PP production between 2007 and 2010. There’s definitely less producers, while Braskem is the clear leader”, Buhler said.

“This could bring some complications but also creates an opportunity for another producer to emerge,” he added. “Dow [Chemical] is one company that is trying to do this in the region”.

“Braskem is the leading resins producer in America, followed by Dow and ExxonMobil. It is involved in most of the projects currently developing in the Latin American continent, and aims to position itself as one of the top five producers in the world,” Buhler said. 

“There are many PE and PP projects currently in Latin America, although sure not all of them will be fully completed. The ones in Mexico and Brazil are making progress while the rest – in Bolivia, Colombia, Peru and Venezuela - are still being studied”, Buhler said.

“Also, it is not a minor detail that production is not expected to increase since there are no plans for new facilities opening for the following couple of years,” he said.

He added: “Mexico is a big resins importer, especially of PE. This will change since there’s a project by Braskem and IDESA that will begin production in 2015 and will have nameplate capacity for over a million tonnes/year of ethylene. However, even with that production, which will be destined for the Mexican market, there will still be a deficit”. 

Plasticos 2011 runs 27-30 June.

By: Cristina Kroll
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