Latin America PP faces high degree of demand risks amid rising feedstocks

Latin America polypropylene (PP) continues to face a high degree of uncertainty stemming from pandemic-related impacts.

Reduced refinery operations have lowered propylene feedstock supply and rising crude prices will likely prevent any further price reductions for PP.

While demand for essential goods remains largely intact, industrial sectors are in steep decline.

Brazil has quickly moved up the list of confirmed coronavirus cases, now second only to the US. The largest country in Latin America now has more than 550,000 confirmed cases, and daily death rates over the past weeks have been in the thousands.

The World Health Organization (WHO) has designated Brazil as the new coronavirus epicentre; a recent ban was implemented on entry to the US for non-citizens who have travelled recently to Brazil.

With no national lockdowns or quarantine orders issued in Brazil, states and cities are acting of their own to prevent the virus from spreading.

The regional economies remain affected by lockdowns and all projections for GDP growth are negative for this year.

Currency depreciation is still weighing on several countries the region, but most countries have had gained part of the recent losses versus the US dollar.

Polypropylene (PP) is used for packaging, ropes, carpets, plastic parts, loudspeakers and automotive parts.

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