Latin America's chemicals, petrochemicals industry expected to remain stable in 2013, with expected GDP growth to boost demand for butadiene, PE, PP, PET, S&P says

Andrew Rogers

SANTIAGO, Chile , February 7, 2013 (BNamericas) –

Standard & Poor's (S&P) expects business conditions to remain stable for Latin America's chemicals and petrochemicals industry this year.

The main economic drivers for the sector are prices of oil, natural gas, and other feedstocks; global -particularly the US and China - and regional GDP growth; and end industries' performance, the ratings agency said.

S&P forecasts GDP growth of 3.5% for Latin America in 2013 and 2014, up from 2.5% in 2012, thanks to Brazil's expected economic recovery and continued growth in other regional economies.

The expected regional GDP growth will bolster demand for several products such as butadiene, urethane, polyethylene, polypropylene and polyethylene terephthalate (PET) as a result of end-products usage in the automotive, food and beverages, and consumer goods markets.

S&P expects high and volatile oil prices to persist this year and petrochemicals spreads, particularly polypropylene, polyethylene and polyvinyl chloride, to remain narrow but possibly recovering in 2014.
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