Venezuela's polymer problems reshuffle

15 September 2016 20:14 Source:ICIS News

A lack of raw materials plagues the country’s polypropylene and polyethylene producers, while polystyrene is expected to re-start soon. Above, a cargo ship sails on Maracaibo Lake, Venezuela. (source: Wikimedia.com)
A lack of raw materials plagues the country’s polypropylene and polyethylene producers, while polystyrene is expected to re-start soon. Above, a cargo ship sails on Maracaibo Lake, Venezuela. (source: Wikimedia.com)

Focus article by Marianela Toledo

HOUSTON (ICIS)--Venezuela’s production of polystyrene (PS) is expected to re-start soon, at the same time, polypropylene (PP) and polyethylene (PE) production problems continue because of raw materials issues, market participants said.

PS production at the Gupo Phoenix plant Estizulia, in Zulia state, was to resume once a cargo loaded with styrene monomer arrives in Venezuela, a source said.

That is good news for PS transformers who have struggled to find, and or import, resins to process after Estizulia, Venezuela's sole PS  plant, shut down due to lack of raw materials.

 “A styrene cargo is expected … we don’t know when,” the source added.

The PS plants have been down for about a year because of the lack of monomer.

The raw material to produce PS is either imported or provided by the state-run Pequiven.

According to another source, Pequiven stopped providing raw materials to Estizulia to focus on the production of PP and PE, according to another source. This information could not be confirmed by Pequiven as the company did not immediately respond to requests for further information.

Pequiven is Venezuela’s raw materials producer, which operates with private companies Polinter and Propilven to produce PP and PE resins supplied to domestic transformers – the processors who take resins to make finished plastic goods.

Estizulia, also known as Estirenos del Zulia, is a privately owned company.

However, as the monomer cargo could bring some relief to the PS market players, sources said that the production of PP and PE continues to be hampered by the propane and ethane supply.

PP and PE production problems were first heard back in August.

The reason for the propane and ethane problems was not clear.

Two sources said the supply of PE and PP has been limited, and orders have not been delivered as scheduled. However, demand remains soft.

Sources agreed that the political turmoil, in addition to a high inflation rate, has caused end-consumption demand to fall.

One of the sources said that salaries had depreciated, but goods costs are higher, and people just cannot afford to buy.

Venezuela’s political and economic conditions remain precarious. Multiple currency exchanges have created additional complications.

Venezuela has three main monetary exchanges. The Dicom replaced Simadi and has a rate that fluctuates according to market supply and demand. The floating rate applies to industrial products and covers imports of non-essentials, and foreign travel.

The parallel exchange covers transactions in the black market or outside any type of governmental regulation.

INSET IMAGE: Packing material made from polystyrene. (imageBROKER/REX/Shutterstock)

By Marianela Toledo