New US PE capacity to help meet rising LatAm demand
Latin America's demand for polyethylene (PE) is expanding alongside its middle class, but the region's existing and planned PE capacity is expected to fall short of demand.
This scenario will force Latin America to import around 50% of its PE supply by 2025, according to a study by IHS.
PE demand in Latin America exceeds 7 metric MMt, at present. However, the region has a PE net deficit of more than 3 metric MMt. This deficit is anticipated to reach 5 metric MMt by 2025.
As the region's economy improves after 2016 and plastics demand continues to increase, the PE supply-demand imbalance will escalate. This will require more imports to meet demand.
The US will be able to meet some of this increase by adding more than 100 metric MMt of new PE production capacity by 2025. Approximately 8 metric MMt of this capacity are slated to come online in the next five years alone.
Worldwide, PE production capacity expansions are forecast at nearly 24 metric MMt between 2015 and 2020.
Brazil is the largest consumer of PE in Latin America, making up 36% of regional demand, followed by Mexico with 26% and Argentina with 10%. Colombia and Chile each account for 5% of regional PE use.
High-density PE (HDPE) makes up 43% of the regional PE market, while linear low-density PE (LLDPE) represents 31% of PE demand. Low-density PE (LDPE) accounts for 26% of total PE consumed.
At present, PE is produced in only five Latin American countries: Argentina, Brazil, Colombia, Mexico and Venezuela.