|
|
 |
|
Viewing report
|
|
|
|
Argentina Petrochemicals Report 2012
Business Monitor International, Nov 2011, Pages: 51
Business Monitor International's Argentina Petrochemicals Report provides industry professionals and strategists, corporate analysts, petrochemical associations, government departments and regulatory bodies with independent forecasts and competitive intelligence on Argentina's petrochemicals industry.
A lack of feedstock access is plaguing the Argentine petrochemicals industry with the prioritisation of residential winter fuel demands leading to severe restrictions in gas allocations to downstream industries and plant shutdowns and undermining hopes of product diversification and expansion, according to BMI’s latest Argentina Petrochemicals Report.
The government has been restricting gas deliveries to factories and power plants so homes get sufficient supplies, as deficit is at 25mn cu m/d, or 20% of average demand. In the winter of 2010, there were cuts of around 30% of supply of normal gas use by industrial clients, including petrochemicals industries, despite ordering more LNG cargoes as a stopgap measure. In a further move to secure gas supply, Argentina is currently exporting about 40% less to Uruguay and Chile than it did in 2009.
In July 2010, producers in the petrochemicals sector, such as TGS, The Dow Chemical Company, PBB Polisur, Solvay Indupa and Profertil,were operating plants at 30-40% capacity on inadequate natural gas supplies, as the country was gripped by a severe cold spell. The cold weather drove up residential gas demand by 60-67mn cu m/d. A lack of ethane supply from Compania Mega led to a reduction in feedstock for Dow Chemical’s 700,000tpa ethylene plants and 600,000tpa HDPE, LDPE and LLDPE facilities in Bahia Blanca.
Dow was forced to idle its ethylene facilities and import ethylene for PE production. Mega, a venture of Dow Chemical (28%), Spain’s Repsol (38%) and Brazil's state-owned Petrobras (34%), gets gas supplies from Repsol YPF’s Loma La Lata field in Neuquen. The company has the capacity to produce 540,000 tpa of ethane, 365,000 tpa of propane, 235,000tpa of butane and 220,000tpa of natural gasoline at Bahia Blanca.
Argentina’s petrochemicals market experienced a strong upturn of at least 25% in 2010 with main consumers experiencing strong growth. However, GDP growth is set to decline from over 4.0% in 2010 to just 1.8% in 2011, dragging down the recovery in the market. BMI cautions that the consumer-led growth in plastics consumption is very short term and is likely to decline to much-reduced levels when tax breaks and subsidies are removed.
With the domestic market headed for slowdown in 2011, petrochemicals output is going to be more reliant on exports and therefore sensitive to exchange rate fluctuations. Over the longer term, BMI continues to see steady depreciation, owing to the current economic model of export promotion and fiscal expansion. The Argentine peso is set to decline from an estimated average of ARS3.90/US$ in 2010 to ARS4.50/US$ in 2011. However, signs that the government may shift away from this model could lead us to adopt a more bullish long-term stance. Argentine PP producers Petroquimica Cuyo and Petroken have proved to be more competitive on the domestic market; although Brazilian PP has duty-free entry its prices are higher than Argentine prices, while imports from the US and Asia have a 15% import tariff which prices them out of the market. Slovay Indupa’s PVC facilities will be less affected by the domestic slowdown in 2011 as PVC exports will benefit from growth in Brazil and the growth in the country’s construction sector.
Product samples
A sample for this product is available. Please Login/Register to download this sample.
|
|
|
|
