15 November 2013 17:23 [Source: ICIS news]
CARTAGENA, Colombia (ICIS)--There will be no new polypropylene (PP) capacity built in Latin America before 2017 due to lack of propylene feedstock, an executive at Colombia-based producer Propilco said on Friday.
“Even as PP demand in Latin America is rising at around 7% annually, no production expansions are expected until 2017. There is no propylene in the region to build another plant,” said Pedro Capella, vice president of special projects at Propilco.
Capella spoke at the 2013 Polyolefins Consulting Seminar organised by the PetroChemical Consulting Alliance ahead of the 33rd annual Latin American Petrochemical Association (APLA) meeting.
Latin America producers are likely to concentrate more on their local and adjacent geographic markets, reducing sales outside the region, Capella added.
In South America, current PP production capacity of 3.01m tonnes/year exceeds estimated demand of 2.73m tonnes in 2013, he noted.
However, by 2015, demand in South America should rise to match capacity, and by 2017, demand is expected to reach 3.32m tonnes, exceeding capacity by around 300,000 tonnes.
Beyond 2017, there could be interest in building PP plants in Latin America, as there is the potential for additional propylene from new propane dehydrogenation (PDH) plants in the US being exported to Latin America, he said.
From 2016-2017, new propylene capacity from about seven PDH plants in the US based on shale gas could increase US PP capacity by around 50%, he estimated.
“The game will be changed after 2017,” said Capella.
“Propylene expansions in the US will likely go to other applications rather than PP, so propylene will be exported from the US to other regions,” he added.
Propilco has 500,000 tonnes/year of PP capacity in Cartagena, Colombia, but imports around two-thirds of its propylene.
The APLA conference runs 16-19 November in Cartagena, Colombia.
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