PLASTIMAGEN ‘19: Colombian PP producer to buy US polypropylene

MEXICO CITY (ICIS)–Plunging feedstock prices have convinced a Colombian polymer producer, who has been buying an Asian feed for much of the past year, to switch to US polypropylene (PP).

PP roducer Esenttia began buying PP in mid-2018 from Vietnam because US material was so high, said Juan Carlos Amaris Martinez, Esenttia’s trading/marketing director, on the sidelines of PLASTIMAGEN MEXICO 2019.

US propylene is no longer sky-high. Propylene prices in southeast Asia have dropped 20% in the past year, but American values have dropped more than twice as much, as the following chart shows. This had a proportional impact on US Gulf PP prices that are now globally competitive.

Amaris Martinez said the arbitrage closed in March, ending his firm’s imports that have been shipped from Haiphong.

“We’re forgetting about Asia,” Amaris Martinez said. “We are looking for the best moment now” to buy US material.

Essentia has been buying US propylene for years, to complement domestic production. In the past, the company received some propylene from Venezuela, but the crisis in that country has closed that option.

Amaris Martinez blamed the rise on oil prices, which since early January have jumped 40%. Benchmark West Texas Intermediate (WTI) closed Wednesday at $62.46/bbl.

Esenttia has two PP plants in Cartagena totaling 500,000 tonne/year capacity, according to ICIS. The company exports 275,000 tonnes/year, mostly to Mexico and Brazil, Amaris said.

PLASTIMAGEN MEXICO 2019 takes place on 2-5 April in Mexico City, Mexico.

Additional reporting by George Martin