Feedstock shortages curtail PP supply in Chile

18 January 2013 16:46  [Source: ICIS news]

HOUSTON (ICIS)--Petroquim, Chile’s polypropylene (PP) producer, has been experiencing shortages of raw materials since December because of technical difficulties in local refiner ENAP’s ethylene plant, a company source said on Friday.

The ethylene problems have been fixed, but now there are problems with the Aconcagua refinery located further north that continue to deprive Petroquim of needed feedstock.

The PP plant in Concepcion has spent more time idled than running this year, and the sporadic runs have been at diminished capacity, the source said.

Braskem, a frequent supplier in Chile also appears to have reduced volumes for this country because of its own maintenance to plants and energy shortages, a Chilean source said without elaborating.

The propylene settlements in the US Gulf and the idling of the 180,000 tonne/year Petroken plant in Argentina are complicating the situation further for PP markets in South America.

Imports from Colombia carry higher prices because of higher propylene costs and have been quoted around $1,800/tonne (€1,350/tonne) CFR, a price Chileans find hard to absorb but one that could be seen as cheap in other markets where large increases have taken hold, such as Mexico.

Chile’s Petroquim has increased PP prices an additional $30/tonne in January that put homopolymers at $1,650/tonne, but with all export sales suspended until inventories are rebuilt.

New increases in February and beyond cannot be ruled out as propylene levels continued to pressure downstream production throughout the continent.

($1 = €0.75)

By: George Martin
+1 713 525 2653

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