OUTLOOK ’14: LatAm PP plants could benefit if PDH plants proliferate

02 January 2014 20:00  [Source: ICIS news]

HOUSTON (ICIS)--Availability of raw materials will continue to be the key for polypropylene (PP) production in Latin America during 2014.

The region has had several production setbacks in 2013, and no new production capacity is coming online at least until 2017 or later.

Much of the difficulty about the decision of expanding production capacity stems from the lack of readily available propylene to feed new projects.

This could be solved if the announced propane dehydrogenaton (PDH) projects in North America materialise as planned.

There are at least eight projects announced in the US Gulf, but not much certainty about how many of them will actually come off the ground.

  Company

Project

Capacity (MT)

Location

Cost

Start-Up

  Dow Chemical

PDH

750,000

Freeport, Texas

NA

2015

  Dow Chemical

PDH

New Plant

NA

NA

2018

  Enterprise

PDH

750,000

Texas, US

NA

2015

  Enterprise

PDH

New Plant

Texas, US

NA

2017

  Formosa Plastics

PDH

600,000

Point Comfort, TX

NA

2016

  Petrologistics

PDH

Expansion

Houston, TX

NA

NA

  Ascend Performance Materials

PDH

NA

Alvin, TX

NA

2015

  Williams

PDH

500,000

Alberta, Canada

900m

2016

There have not been refinery expansions in Latin America capable of increasing propylene output for chemical plants in a substantial way.

An accident at the YPF refinery in Argentina early in 2013 has created supply problems for the nearby 190,000 tonne/year Petroken PP plant.

Chile’s ENAP has had plenty of maintenance stops this year, further depriving downstream producers of ethylene and propylene.

However, the shortages of PP are not as serious as the ones seen for PE in the region. This is because companies such as Colombia’s Propilco or Mexico’s Indelpro have available volumes for exports.

Brazil’s Braskem is another important exporter in the region, but the growth of its internal markets market is taking a higher percentage of local production.

None of these conditions are expected to change in 2014, and the new PDH plants in the US are still a few years away.

PP Imports from the US Gulf, the Middle East and Asia will continue to play a role in Latin America in the short term, until some of the projects floating in the region come off the ground.

Prices have been particularly high in Brazil, where the local producer takes advantage of steep import duties and limited competition.

On the other end of the spectrum, Venezuelan PP prices have been super low all year long,

Currency fluctuations had much influence on Latin prices, with the exception of Venezuela, where the exchange is fixed at Bs6.30 per US dollar.

The rise of the dollar has kept prices steadier in 2013, with many price increases done solely to keep up with inflation and currency devaluation.

This is expected to continue unchanged in 2014 and beyond.

RECENT LATAM PP PRICES

LatAm PP price graphic


By: George Martin
+1 713 525 2653



AddThis Social Bookmark Button

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly

ICIS news FREE TRIAL
Get access to breaking chemical news as it happens.
ICIS Global Petrochemical Index (IPEX)
ICIS Global Petrochemical Index (IPEX). Download the free tabular data and a chart of the historical index