Delay in completion of petrochemicals project Fénix will hurt the Mexican economy in the near future. In early September, it was announced that the Fénix project, a joint venture between Canada's Nova Chemicals and Mexico's state oil company Pemex, would be downsized from US$2bn to US$840mn as the finance ministry declined to approve discounts on feedstock sought by potential investors. In 1992, Pemex produced 65-70% of the petrochemicals raw materials for Mexico's domestic plastics industry. This has declined today to about 40% of demand for polyethylene and complete stoppage for polypropylene.
The Mexican petrochemicals industry is expected to witness a slow down in 2006 as it is a presidential election year. Recovery is expected in the following years if energy sector reforms can be completed before President Vicente Fox's administration ends in December 2006. Mexico could miss the bus as the slowdown in the petrochemicals industry will damage the country's ability to compete with countries like China, India, as well as Arab countries that are expanding their petrochemicals infrastructure. Mexico's economy and trade balance will be affected if the country continues to export crude oil and then imports it in the form of higher value-added products.
09-Nov-05 
{{comment.DateTimeStampDisplay}}
{{comment.Comments}}