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Argentina's Pampa increasing output rates of SBR, PS units after restart

Houston — Argentina-based Pampa Energia has increased output at its recently restarted polystyrene and styrene-butadiene-rubber plants, a company source said Friday.

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Pampa had shut down production of polystyrene (PS) and styrene-butadiene-rubber (SBR), along with associated ethylene and styrene units, in early December on poor economics and weak regional fundamentals, the source said.

Restart procedures began for PS and SBR in late January, with the units running at low rates as Pampa planned to slowly increase production throughout February.

Output currently stands at 60% capacity for the SBR unit and 80% for the PS unit, the source said.

Pampa's SBR production at the Puerto General San Martin Integrated Petrochemical Complex (PGSM) in Santa Fe province has a nameplate capacity of 55,000 mt/yr. The company's PS operations in Buenos Aires province has a nameplate capacity of 65,000 mt/yr.

The source did not address restart plans for Pampa's styrene monomer plant, which is also located at the PGSM and has a nameplate capacity of 160,000 mt/year.

Pampa plans to restart PGSM's nearby naphtha-fed ethylene unit at the San Lorenzo plant in March, so long as market conditions improve in the interim to warrant increased production of all associated derivatives, the source said.

Demand for PS, for example, was expected to close 2018 approximately 12% lower from 2017 levels, a company source said in November, when Pampa was planning the aforementioned plant shutdowns.

Pampa originally shut down the four plants in early December on weak regional demand, which was expected to be exacerbated by seasonal vacations and industrial shutdowns in the months that followed.

Many South American markets -- particularly in Argentina and neighboring Brazil -- are especially quiet during December and January as many regional industries cease operations or scale back production due to holiday vacations.

Additionally, a severe economic downturn in Argentina in 2018 featured currency devaluation of more than 100%, which led to government implementation of export tariffs. Pampa saw export demand to Brazil fall off as a result and factor into production strategies in recent months.

The Argentinian peso went from a value of 18.4741 against the US dollar on January 2, 2018, to 37.6503 on December 31 of last year, representing a devaluation of 103.8%, according to S&P Global Platts data.

--Phillipe Craig, phillipe.craig@spglobal.com

--Edited by Derek Sands, derek.sands@spglobal.com