Chile Petrochemicals Report 2013
Business Monitor International, November 2012, Pages: 55
BMI’s Chile Petrochemicals Report examines the challenges facing the industry, including the impact of low-cost imports, the tough regional export market and the shortfall in gas feedstock. The report assesses how falling gas supplies are influencing recent developments in the methanol sector.
We estimate that methanol output in 2012 was around 500,000 tonnes – based on Methanex’s statement that just one of four plants is in operation at just 50% capacity. This compares to Methanex’s total operating capacity of 3.84mn tonnes per annum (tpa) in Chile. Methanex’s plans to move one of four methanol plants from Chile to the US by end-2014, with indications of a second moving abroad,
demonstrates the corrosive effects of low levels of competitively priced gas supplies on Chilean petrochemicals production.
Chile’s ability to revive its petrochemicals industry will depend on overcoming upstream supply constraints. At present, Chilean ethylene production is reliant on naphtha, provided by local refineries.
Naphtha represents 76% of the country’s feedstock slate with 16% drawn from butane and 8% from ethane. Opportunities for expansion remain sparse. Refining capacity at the end of 2011 stood at 226,800b/d. Chile had planned to increase the total to 300,000b/d by the end of 2008 under a significant state-backed upgrading and expansion programme; however, owing to project delays, this deadline was pushed back.
Energy shortages plague polymer production. A lack of propylene feedstock has meant that Petroquim has failed to produce near the 150,000tpa capacity at its polypropylene (PP) plant. As such, BMI forecasts that capacities will not be increased over the forecast period, with ethylene capacity at 60,000tpa, propylene at 100,000tpa, polyethylene (PE) at 46,000tpa and PP at 150,000tpa.
BMI has revised the following forecasts/views:
- Chilean producers are also facing increased competition as a result of free trade agreements
(FTAs), with US producers managing to increase their market share in recent years. Polymer production has never been sufficient to satisfy local demand and this pattern will continue over the forecast period – with imports becoming increasingly important to the Chilean market.
- Chile has low levels of hydrocarbons reserves. Oil reserves of 150mn bbl in 2012 are set to decline to 135mn bbl by 2016, with domestic supply falling from an estimated 9,230 barrels per day (b/d) in 2011 to 5,000b/d in 2016. The gas outlook has been clouded by Argentina's inability to deliver contracted supplies. As such, the Chilean petrochemicals industry will remain a marginal, local player that will struggle to compete on the domestic market.
- In BMI’s Latin America Petrochemicals Risk/Reward Ratings (RRRs), Chile scores 45.1 points and lies in sixth place, 3.9 points behind Argentina and 1.9 points ahead of Colombia. Its main strengths are its market strength, but in terms of industrial activities it remains a marginal player and its position is unlikely to improve while there is a lack of feedstock capacity.
Executive Summary 5
SWOT Analysis 7
Chile Petrochemicals Industry SWOT 7
Chile Political SWOT 8
Chile Economic SWOT 9
Chile Business Environment SWOT 10
Global Petrochemicals Overview 11
Global Oil Products Price Outlook 15
Table: BMI's Refined Products Forecasts, 2010-2016 16
Table: Middle East Outperforms In Terms of Passenger Growth 20
Latin America Overview 25
Chile Market Overview 30
Table: Chile Petrochemicals Facilities 30
Industry Trends And Developments 31
Petrochemicals Risk/Reward Ratings 32
Table: Americas Petrochemicals Risk/Reward Ratings (Scores Out Of 100) 34
Chile 34
Industry Forecast Scenario 35
Table: Chile's Petrochemicals Sector, 2010-2017 36
Macroeconomic Outlook 37
Table: Chile – Economic Activity, 2011-2016 39
Company Monitor 40
ENAP 40
Methanex 42
Petroquim 43
Petroquimica Dow 44
Glossary Of Terms 45
Table: Glossary Of Petrochemicals Terms 45
Country Snapshot 46
Table: Chile's Population By Age Group, 1990-2020 ('000) 47
Table: Chile's Population By Age Group, 1990-2020 (% of total) 48
Table: Chile's Key Population Ratios, 1990-2020 49
Table: Chile's Rural And Urban Population, 1990-2020 49
BMI Methodology 50
How We Generate Our Industry Forecasts 50
Chemicals And Petrochemicals Industry 50
Cross Checks 51
Business Environment Ratings 52
Table: Petrochemicals Business Environment Indicators And Rationale 53
Weighting 53
Table: Weighting Of Indicators 54
Company Monitor
ENAP
Methanex
Petroquim
Petroquimica Dow
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