El Niño-driven blackouts weigh on Ecuador’s polymer demand

Ecuador's polyolefin demand is being curtailed by industrial-sector power outages in October caused by severe weather.

A local plastics supplier said conditions remain challenging, with power outages occurring three days a week amid the onset of El Niño, which has brought heavy rainfall along the Pacific coast and drought in the Amazon region, where the country's hydroelectric plants are located.

According to the same source, the government has ordered industries to shut down two to three days per week. "This is serious for the sector."

The hydrological conditions affecting Ecuador's main hydroelectric power plants, combined with difficulties supplying fuel to thermal generation barges due to rough sea conditions, "require timely operational measures" to optimize consumption by large users and preserve energy reserves, the government said in a statement Oct. 9.

Since Oct. 12, scheduled power outages for high-voltage and industrial medium-voltage customers have been occurring three days a week, Monday through Friday, according to Ecuador's National Electricity Corporation, or CNEL.

"We haven't sold anything because of the uncertainty caused by the inability to produce," a trader said.

Power rationing has affected several industries, including the plastics sector. Ecuador imports most of its polyolefins from the US and Asia, as it has no domestic producer of these resins.

A second trader said that industrial power outages are extensive, lasting for entire days. "This will, of course, affect operations and demand."

According to the same source, it may last throughout Q4 due to the El Niño climate pattern.

The first source said the situation is unlikely to be fully resolved until the second quarter of 2027, despite a government official's announcement that 72-hour electricity disconnections for the industrial sector will be suspended starting Nov. 1.

Platts last assessed high-density polyethylene blow molding at $1,230/metric ton CFR WCSA Oct. 21, while polypropylene homopolymer grade was assessed at $1,385/mt.

"The National Government's priority is to protect the electricity supply for Ecuadorian households," Juan Carlos Blum, Minister at the Ministry of Environment and Energy of Ecuador, posted on X on Oct. 8.