A Mexico petrochemicals report examines the enormous long-term feedstock potential provided by shale gas, but warns of a risk of a contraction in output in 2013 if the US economy does not bounce back. As per Reportbuyer.com, in 2012, Mexico's olefins capacities included 1.58 mln tpa of ethylene and 660,000 tpa of propylene. These fed downstream capacities of 875,000 tpa polyethylene (PE), 590,000 tpa polypropylene (PP), 667,000 tpa polyvinyl chloride (PVC) and 310,000 tpa polystyrene (PS). It is widely recognised that these capacities are not large enough to meet domestic demand, let alone allow the country to take full advantage of its strategic position as a supplier to the US market. Mexico petrochemical output has suffered due to the effects of the global economic downturn, despite a relatively stable domestic market. Mexico's dominant oil, gas and petrochemicals producer Pemex reported that its petrochemicals output declined 13.4% year-on-year (y-o-y) to 7.38 mln tons in the first eight months of 2012, having fallen 6.1% y-o-y to 12.38 mln tons in 2011. Mexico is aiming to raise total petrochemicals production capacity from around 9 mln tpa in 2011 to 22.6 mln tpa by 2026; Braskem's Ethylene XXI project will account for 15% of this increase. Reaching this goal is contingent on the full development of the country's shale gas reserves (estimated at 19,300bcm in 2012) as well as a reliable source of raw materials and greater private sector participation.