South America to be key market for global PE exports through 2018

Bob Moser
PLASTICS NEWS CORRESPONDENT

Published: September 13, 2013 4:30 pm ET
Updated: September 13, 2013 5:02 pm ET

Related to this story

Topics Polyethylene, Materials Suppliers

SÃO PAULO — South America will be the key market for North American polyethylene producers to focus exports over the next half decade, as regional demand is projected to rise nearly 5 percent per year through 2018 while production capacity remains stagnant, according to IHS Inc.

The continent is currently a net importer of PE to the tune of 4 billion pounds, which should increase to 6.6 billion pounds by 2018. North America currently supplies 52 percent of South American PE imports, a figure projected to rise to 62 percent within five years, said Nick Vafiadis, senior director for global polyolefins and plastics at IHS, during the Latin American Petrochemicals & Polymers Conference in São Paulo, Sept. 4-5.

PE global demand is projected by IHS to grow by an average of 4.6 percent annually over the next five years, from 181 billion pounds this year to 227 billion pounds in 2018. By the end of this decade, North America will be a shale gas-driven force in competitive production and export.

"We are going through a significant, fundamental change in the market (re: shale gas), and it will affect all of you in production and trade," said Rina Quijada, senior director Latin America for IHS. "It may seem we talk too much about shale gas, but the message we want to leave South America's southern cone with is to expect this major shift."

Global ethylene production in 2013 is expected to reach 293 billion pounds, out of a potential 340 billion pound-production capacity (86 percent utilization). Of that, Asia-Pacific leads suppliers with 32 percent of total production, followed by North America (23 percent). South America trails all major markets with 4 percent.

South America's 2013 ethylene production capacity is 13 billion pounds, with Brazil accounting for 71 percent of that total. Naphtha accounts for 78 percent of Brazil's production, and Braskem imports 52 percent of its total naphtha demand for crackers.

There's little flexibility for Brazil in terms of current feedstocks, and the devaluation of Brazil's currency this year has made imports even more costly, Vafiadis said. Brazil is currently producing about 441 million pounds of ethylene from ethanol, but optimism from recent years of growth in this green niche has waned, following multiple delays on new ethanol-to-plastics projects, and the steadily rising price of ethanol for auto fuel.

Proposed crackers at Brazil's Comperj project are expected to move to a natural gas-based feedstock from offshore pre-salt oil exploration, and away from naphtha as originally planned. Braskem said it will announce in 2014 whether it will go forward with a Comperj investment, and is believed to be re-evaluating the project based on shale-based capacity additions in North America.

Brazil's Comperj likely will not be operational until at least 2019, Vafiadis said.


Comments

South America to be key market for global PE exports through 2018

Bob Moser
PLASTICS NEWS CORRESPONDENT

Published: September 13, 2013 4:30 pm ET
Updated: September 13, 2013 5:02 pm ET

Post Your Comments


Back to story


More stories

Image

Italian compounder opening first US plant

October 30, 2014 9:45 am ET

The song of the South has led Italian compounder So.F.Ter Group to open its first plant in the United States in Lebanon, Tenn.    More

Image

Ineos closing Barex plant, exiting business

October 29, 2014 3:58 pm ET

Materials maker Ineos Group is closing its only global Barex-brand polyacrylonitrile (PAN) resin plant in Lima, Ohio. Ineos – based in Rolle,...    More

Image

DSM picks Augusta, Ga., for nylon plant

October 29, 2014 11:49 am ET

Materials firm Royal DSM NV has chosen Augusta, Ga., as the site of its new North American nylon resin plant.    More

Image

Teknor Apex expands production of recycled nylon to Europe

October 29, 2014 10:12 am ET

Materials firm Teknor Apex Co. is making its recycled nylon compounds available in Europe for the first time.    More

Image

Unplanned disruption in Texas hits Huntsman's quarterly earnings

October 29, 2014 9:30 am ET

Huntsman Corp. saw its earnings drop in the third quarter of 2014, due in part to an unplanned disruption at its Port Neches, Texas, plant.    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

October 27, 2015 - October 29, 2015Plastics Financial Summit - New York - 2015

More Events