Latin America polyethylene prospects down in the short term

HOUSTON (ICIS)--Latin American polyethylene (PE) prices are headed down, under pressure from lower crude oil prices worldwide and long supply in the US Gulf, where production capacity has increased in 2018. Another important factor has been the impact of a strong US dollar in local currencies. This has been more noticeable in Argentina, where the local currency has had a strong devaluation in 2018. However, a strong dollar has affected many other Latin American nations, too. In Mexico, the main problem has been the proliferation of offers from US PE producers. With all export channels for trade between the two countries firmly established by years of commerce under the North American Free Trade Agreement (NAFTA), Mexico has long been a preferred destination for US PE exports. Mexico’s own PE production has increased in the last three years, since the Ethylene XXI complex came on line, and this year in particular, because Pemex is importing ethane to reactivate its own PE production.