Alpek optimistic on Pemex's plans to boost Mexican petrochemical sector: CFO

Mexico-based Alpek is optimistic about Pemex's plans to strengthen the country's petrochemical industry, executives said during the Q4 earnings call Feb. 19.

"We think if it's done the right, that could improve our competitiveness in Mexico," chief financial officer and director of administration and finance José Carlos Pons said.

Pemex will invest 20,000 million Mexican pesos (around $975 million) to increase its petrochemical output over the next six years, Pemex senior officials said Feb. 12.

"[The government] is looking at different parts of the petrochemical industry to improve the availability, for example, of some feedstocks that are critical to ourselves," Pons said. "They're thinking on investing in some of their facilities so that that will allow us to have better feedstocks and increase our competitiveness."

However, Alpek anticipates a continuation of stable demand levels and challenging industry conditions for the petrochemical industry in line with those seen in 2024, while freight costs are expected to return to historical levels, said chief executive officer Jorge Young during the company's Q4 earnings call on Feb. 19.

Elevated ocean freight rates and long lead times posed a challenge for participants through most of 2024.

During the call, company executives discussed the potential impacts of the US delaying the 25% tariff on all imports from Mexico by one month.

The US is a net importer of virgin PET, having received around 1.4 million mt in 2024. Mexico accounts for 18% of the total PET imports into the US, according to the US International Trade Commission data.

"We have US operations that mainly supply the US, and that's also the case in Mexico and Latin America," Pons said. "So, I guess that's something that helps us mitigate potential tariffs."

Sale volumes drop, spread between North America and Asia paraxylene narrows

Polyester sale volumes dropped 7% quarter over quarter, while plastics/chemicals sales dropped 11% following typical seasonal dynamics, according to the company's Q4 earnings report Feb. 18.

Alpek's polyester segment includes PTA, polyethylene terephthalate and recycled PET. The sale volumes exclude intracompany sales.

According to the earnings statement, US reference paraxylene prices decreased 13%, narrowing the spread between North America and Asia, remaining 22% lower than the previous quarter.

Paraxylene is a key feedstock for PTA, which is a precursor for PET. PTA/PET production in the US is concentrated on the East Coast and heavily employs imported PX, which is more attractively priced than volumes from the Gulf Coast.

Platts assessed PET spot import prices at $1,301/mt DDP US West Coast on Feb. 19, down $22/mt week over week, amid market feedback of weak demand.