Polypropylene demand in Mexico is again poised for strong growth in 2018 despite uncertainty surrounding the upcoming presidential election, a source with producer Indelpro said Monday.
The growth was expected despite stifled buying appetite in early Q1 on the back of rising feedstock propylene prices, the source said on the sidelines of the American Fuels and Petrochemical Manufacturers' conference.
"Mexico's market has been growing by 4%-6% in recent years," the source said, adding that expectations were for similar growth this year.
Mexico's polypropylene demand is estimated at 1.4 million mt/year, with imports from the US surpassing 550,000 mt for homopolymer grades alone, per International Trade Commission data. Indelpro's production capacity, located in Altamira, Tamaulipas state, is estimated at 590,000 mt/year.
Mexico's presidential elections, slated for July 1, are unlikely to impact demand in 2018 but could play a role in 2019, the source said.
Populist candidate Manuel Lopez Obrador of Morena is the frontrunner over PRI's Jose Antonio Meade and PAN's Ricardo Anaya.
Feedback in recent weeks suggests a major concern among polymer market participants remains the possibility of a devaluation of the peso against the dollar in the days following the election, which could negatively impact any participant buying in dollars but selling in pesos.
"The peso has been stable around 18-19 per dollar in recent months," a second Mexican PP source said. "This could change the day after the elections."
