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

ISO publishes international standard for measuring phthalates in toys

August 19, 2014 10:40 am ET

The Geneva-based International Organization for Standardization (ISO) has published an international standard on phthalates used as plasticizers in...    More

Image

RTP expands very long fiber thermoplastic production to Mexico

August 19, 2014 9:47 am ET

RTP Co. has introduced very long fiber reinforced compounds at its Monterrey, Mexico, facility.    More

Image

Ineos takes its first step into UK shale exploration

August 18, 2014 1:15 pm ET

Ineos Group AG has moved into United Kingdom shale exploration with the purchase of BG Group’s 51 percent share of the shale section of a joint ...    More

Image

Construction firm invests in bioplastics maker Meredian

August 15, 2014 10:22 am ET

Bioplastics maker Meredian Inc. didn't have to go far to find a new investor.    More

Image

Sabic gets cracking on US shale gas imports

August 14, 2014 11:46 am ET

Saudi Basic Industries Corp. is modifying its cracker at Teesside, England, to handle shale gas imported from the United States. The $15 million crack...    More

Market Reports

Thermoformed Packaging 2014 Market Review & Outlook North America

This in-depth report analyzes economic and market trends, legislative/regulatory activity impacting supply and demand, business opportunities and threats, materials pricing, manufacturing technology, as well as growth strategies being implemented by thermoformed packaging companies.

Learn more

Pipe, Profile & Tubing Extrusion in North America 2014

U.S. demand for extruded plastics is expected to grow by 3 percent in 2014, with PVC remaining the largest segment.

Plastic pipe will post the strongest gains through 2018, continuing to take market share from competing materials in a range of markets.

Our latest market report provides in-depth analysis of current trends and their financial impact on the pipe, profile and tubing extrusion industry in North America.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

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

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

More Events