Import controls in Argentina trouble PP transformers

12 January 2012 22:37  [Source: ICIS news]

HOUSTON (ICIS)--Tighter import controls in Argentina are placing polypropylene (PP) transformers in a bind because there is not enough domestic material, sources said on Thursday.

Import restrictions started early last year, when the government mandated that companies must secure an import licence from the commerce department to import PP resins.

The process of granting a licence takes from 60 to 120 days, transformers said. For this reason, some market players received an exemption that allowed them to make several purchases abroad with one multi-purpose licence.

Transformers say the government has ceased issuing the exemptions. When the existing exemptions expire, every purchase will have to be authorised by a corresponding licence.

PP co-polymers are in short supply in Argentina because Dow Chemical, the local ethylene producer, does not make enough of the monomer.

Brazil’s Braskem is the largest seller of imported PP material in Argentina. The company has been struggling as of late to place PP with clients that have trouble securing a licence.

A booming Argentine automobile industry has increased demand for PP products, but local transformers lack the necessary feedstocks.

Import controls extend to a large number of products. Where possible, the government wants to substitute imports with locally produced goods.

Electricity and natural gas tariffs are also on the rise to offset a large energy deficit caused by soaring demand and shrinking domestic production of energy.

Energy subsidies to some sectors of the population are being gradually eliminated to increase government revenue. Public transportation is also more expensive, according to local media reports.

For more on PP visit ICIS chemical intelligence

By: George Martin
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