June, 2004

NEW: QuiMax has re-designed its Web Page. Beginning July 2004, clients will be able to access the NEW site and find useful and updated market information relevant to the petrochemical industry in Latin America.

Argentina - Industrial output declined in April. Energy saving program has been implemented. Natural gas exports to Chile, Uruguay and Brazil have been restricted. Thermoplastic demand remains strong. Convertors have built inventories in anticipation of higher prices. Most plastic end-use segments continue an upward demand trend. Construction declined somewhat during April/May. Old ICI LDPE unit has been shutdown.

Brazil - Country's GDP increased 2.7 percent in Q1. Naphtha prices increased by 21.0 percent in June. Olefin producers will have to wait until July to pass on higher feedstock costs. Thermoplastic prices are expected to increase by 10 to 15 percent in June. Convertors began their speculative purchases in order to mitigate impact of higher production costs. Petrobras announced plan to build a new PP unit with capacity to produce 300,000 tons per year.

Mexico- Surprisingly strong GDP growth was reported for Q1 2004. Demand in May for most petrochemicals was better than April. Pemex's VCM unit at Pajaritos at reduced rates. VCM supply to PVC producers inadequate in May. Most resin prices reported increases in May. PVC demand began to show signs of improvement in May. Speculative buying begins in June. Inventory level at convertors comfortable-to-low.

Venezuela- Surprisingly strong GDP growth reported for Venezuela during Q1 2004. Almost 30 percent increase compared with Q1 2003. Although at low rates, both E/P crackers continue to operate in May. Limited ethane supply continues to require imported ethylene to supplement local demand. Relative political stability in Venezuela is expected for the month of June as a presidential referendum is set to take place in early August.

USA - A revised first quarter 2004 puts GDP growth at 4.2 percent compared with Q4 2003. Energy prices continue to hike production costs at US Gulf Coast. No relief in sight for natural gas prices, currently above US$ 6.0 per MMBtu.