Growing demand for polyolefins in South America makes traders out of consultants

14-Jan-11

Consultants who earlier assisted petrochemical companies with their market strategies in South America are now attempting to cash in on growing demand for polyolefins in the continent by becoming traders, as per Platts. An attempt is underway to source good volumes of polyolefins from the region into countries like Brazil, Colombia and Argentina. Demand for polyolefins in South America is estimated to increase at 5-6% for the next five years. It is estimated that while South America's polyolefins manufacturing capacity increased by over 10 million tons in 2010, it increased by over 25 mlpa tpa in the Middle East in the same period. The incremental capacity in South America is unable to meet rising demand. Capacity addition in the Middle East is able to meet demand in South America, and since most of the new Middle Eastern plants employ gas as feedstock, polymers from these regions is cheaper as compared to products emerging from Asia, despite a longer transit period.