FocusAPLA '11: Brazilian petchem demand slows down in Q4

06 November 2011 20:42  [Source: ICIS news]

BUENOS AIRES (ICIS)--Brazil’s petrochemical demand slowed down in the fourth quarter, in line with a weakening pace in the other regions, a market source said on Sunday.

The slowdown has taken a toll on derivative demand, forcing crackers in Brazil to cut operating rates, the source said on the sidelines of the 31st Latin American Petrochemical Association (APLA) annual meeting in Buenos Aires.

Crackers in Brazil are running at around 85% of capacity, the source said, adding that the figure already includes the shutdown of Braskem’s Triunfo 2 cracker in late October.

The 450,000 tonne/year unit in the south of Brazil will be down for 30 days, according to the company.

Market talk circulated at the APLA conference that Braskem could move forward the maintenance at another cracker, which is scheduled to go down next year because of weak market conditions.

If that happens, cracker operating rates in Brazil could fall into the 70% range, the source said.

Braskem was not immediately available to comment.

Demand for basic chemicals such as ethylene and propylene has also slowed in the US and Europe.

US ethylene contract prices fell by half a cent to 54 cents/lb ($1,190/tonne, €869/tonne) in October, extending a downtrend that began in June, when the US contract fell by 3% after four monthly increases.

The US monomer has since shed another 5% on weakening demand, including softness in the housing market, which has pushed US polyvinyl chloride (PVC) demand to a five-year low in 2011, a market source said.

The situation in Europe is similar, a propylene producer said, adding that demand in the region has dropped sharply since the first half of 2011.

European crackers have also reduced operating rates because of poor market conditions.

Crackers in Europe are heard to running at 70-75% on average, although some units are still running closer to 80%, depending largely on location and derivative portfolio.

The 2011 APLA conference ends on Tuesday. 

($1 = €0.73)

For more on ethylene visit ICIS chemical intelligence


By: William Lemos
+1 713 525 2653



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