Corrections in petrochemical prices have been long coming, yet the speed and sharpness of the relapse surprised the industry. A reduction in margins had started in 2019, but the pandemic distorted the cycle, putting on hold the construction of world-scale petrochemical plants and playing with consumption behaviors as economies closed and re-started. Today, those capacities in Asia and the US that have been years in the making have come onstream, oversupplying the market.

As a net importer of chemicals, Latin America (Latam) is absorbing a fair share of that product, putting pressure on its own domestic producers. In the competition with Asian and American products, Latam producers are at a disadvantage due to a shortage of feedstocks, as well as more expensive feedstocks. To traverse this difficult part of the cycle, players must leverage their best attributes. In Brazil, chemical producers and distributors focus on scale in one of the world’s biggest markets, while Mexico is all about location, as a proxy investment destination to its powerful neighbor.

If there is a light at the end of the long, winding tunnel of the petrochemical downcycle, it flickers green. Or at least, this is what every petrochemical player we interviewed for this edition seems to think. For every negative figure in the sales of olefins, aromatics, and other basic chemicals, there is a ray of hopeful growth in products with a green component. The availability of renewable generating sources like wind, solar, or biomass is also identified as a significant opportunity for the growth of green chemistries. Meanwhile, the traditional chemicals are not in a bad spot either in the context of the energy transition, as they become a more prominent outlet for oil use. In Latam growth in bio-based, recycled or green-powered products parallels growth in oil and gas production. Most of our interviewees concede both are necessary.

TESTIMONIALS

"It was great to work with the GBR team. GBR has a good knowledge of the petrochemical market and has a very good network in the South America market.” – Daniela Manique, CEO Latin America, COATIS GBU, Solvay

“GBR joins articles and interviews with an excellent level of opinions about the petrochemical market. We can see that through the great quality of the professionals that contribute with their perspectives.” – Simone de Faria, Head of Latin America, Townsend Solutions

“For IDESA it’s always very important to be in constant contact with GBR to keep up to date on industry trends. We have been long term allies, and always it’s a great pleasure to have interesting conversations with them.” – Patricio Gutierrez Fernandez, President & CEO, Grupo Idesa

“As in previous years, GBR has achieved an outstanding job by releasing the Latin American Report 2023, connecting the chemical sector through high level information and interviews with key stakeholders”. – Martin Sack, Regional Head Americas, Leschaco

“It was a great pleasure to work together for the GBR report released by APLA. It provides excellent information covering the challenges of this sector in Latin America” – Jorge de Zavaleta, Executive Director, CIQYP

“GBR has done a wonderful job in understanding and sharing their knowledge about the petrochemical and chemical markets in Latin America. At Acoplasticos we are very happy to have contributed our insights for the reports.” – Daniel Mitchell, President, Acoplasticos

“Our partnership with GBR has been of great value. Beyond being a relevant news channel, it provides key business reports for many industries. I am honored having been interviewed by GBR and having the opportunity to update about our business.” – Jan Krueder, CEO, Química Anastacio

“We are glad to be part of Latin America Petrochemicals and Chemicals report, 2023 edition, even more in this year of an important milestone for OCQ Group’s expansion with the acquisition of Elekeiroz. We count on GBR in promoting the chemical and petrochemical sector in Latin America and in helping us to inform customers and other stakeholders about our markets.” – Francisco Fortunato, CEO, Elekeiroz/OCQ Group

“We are very pleased to have GBR covering APLA meetings. They add a professional insight of market trends and great interviews along the year.” – Fabiano Machion, General Manager, South America New Port Tank

“I want to thank the GBR team for the support and outstanding work done in the Latin America Petrochemicals and Chemicals 2023 report. It was a pleasure to be part of it.” – Murilo Costa, Commercial Manager LATAM, HOYER Global