News

Not far from the Port of Coatzacoalcos in Mexico, a sprawling new petrochemical complex owned by Braskem-Idesa has risen from the ground, poised to help the country minimize its ballooning polyethylene deficit. And while production has been slower to come on line than initially expected and there is talk within the market that delivery of enough ethane to run the 1 million mt/year ethylene-capacity steam cracker has been an issue, Braskem-Idesa is years ahead of their Latin American counterparts, many of whom are grappling with financial issues stemming from a low-crude environment and see their futures uncertain. Beyond Mexico, proposed petrochemical expansions have fallen by the wayside in Latin America. Ambitious olefins/polymer projects in Brazil and Venezuela have been effectively paralyzed, while others in Peru and Bolivia also remain in limbo. Talk of major polymer expansions in Argentina, another country with some of the world’s largest shale gas reserves, has been just that. Polyethylene production in Chile, a strong and growing market for resins, ended in May 2014. Since the plunge of oil prices during the second half of 2014, state-owned energy companies including Petrobras in Brazil, Ecopetrol in Colombia and Pemex in Mexico have all hinted at divestitures of their petrochemical assets as a way to cope with diminished oil revenue. In 2015, the polyethylene deficit for Central and South America stood at more than 1.5 million metric tons, and that deficit is forecast to grow to more than 2 million metric tons by 2025, according to S&P Global Platts Analytics. South America possesses the necessary natural resources and a growing middle class that will drive greater demand for polymers and other petrochemicals over the next 15 years. However, the Centr...