What is your assessment of Argentina’s petrochemical sector in 2025?

In 2024, Petrocuyo faced a challenging business environment driven by both domestic and global factors. Argentina’s government liberalized the country’s economy, removing sector-specific policies. Import tariffs on petrochemicals have been lowered, whilst in Brazil, tariffs have been raised.

Meanwhile, China has implemented a policy of self-sufficiency across all plastics, including polypropylene, Petrocuyo’s core product. This policy generated over 28 million t/y of new capacity, and significant quantities of the surplus have been redirected into Latin America. Global oversupply caused severe price declines, with major petrochemical companies reporting sharply reduced profits.

Argentina was not immune. Petrocuyo responded by optimizing fixed and variable costs and adapting operations. We anticipate that global demand will take until around 2030 to absorb current excess capacity.

What difference could removing Argentina’s export tariffs on plastic raw materials make to competitiveness?

Unlike for most chemicals and petrochemicals, Argentina’s export duties on plastic raw materials remain in force. The government intends to remove them by late 2025 or early 2026. Other current burdens, which we hope to see reduced in the government’s broader tax reform, include gross income and financial transactions taxes. 

The plan is to cut public spending first, then reduce taxes, with slow progress, but ongoing. October’s midterm elections will be key. A solid, strong result could advance tax and labor reforms. Petrocuyo is preparing to capitalize on the eventual export duties removal and improved business conditions once reforms are implemented.

How do you expect this situation to evolve?

Though the current global oversupply of plastic raw materials has delayed our growth plans, we expect to pursue them in the coming years thanks to the petrochemical feedstocks availability expected from Vaca Muerta. Although significant infrastructure investment is still required, it will certainly provide impetus for future expansion.

While oil production development has evolved rapidly, natural gas liquids such as ethane, propane, butane, and natural gasoline remain unavailable. Initial projects have focused on gas conditioning for pipeline transportation. Extracting these liquids will take several years. Petrocuyo aims to be in a strong position when they become accessible. This will enable our participation in investment frameworks such as the RIGI, which currently primarily benefits large-scale projects in oil and gas development and mining.

For petrochemicals, new production units will only be feasible once global demand growth catches up with supply. If Argentina’s conditions improve and the necessary investments are made, Vaca Muerta could provide competitively priced feedstocks, supporting both national industrial development as well as our goal to expand Petrocuyo’s role in regional polypropylene production.

What advances has Petrocuyo made in plastic circularity?

Petrocuyo’s circular plastic production operations have advanced significantly, achieving certification for products containing recycled material, including post-consumer sources. We are working with suppliers to produce polypropylene from alternative feedstocks, such as pyrolysis oil and used cooking oils, which can yield propylene from waste. These processes are already certified.

The main barrier remains market adoption, as buyers must commit to using recycled or waste-derived materials. While current volumes are low, Petrocuyo is fully prepared to meet growing demand as interest increases, positioning itself as a reliable supplier of these sustainable materials.

What is the importance of plastic circularity?

Plastic reuse is a natural response to environmental concerns. Plastics are highly visible in oceans because they float, unlike other waste that sinks and remains unseen. The true issue here lies in poor waste collection and disposal systems, which currently allow debris to reach the sea. From Petrocuyo’s outset, we have worked to support circularity, ensuring it can actively contribute to sustainable plastic production.

Could you summarize the key challenges and opportunities you foresee?

Our main challenge is managing costs amid shrinking margins across the petrochemical industry, a critical factor for survival. We remain focused on efficiency while maintaining a long-term view of future opportunities.

In Argentina, new, competitively priced petrochemical feedstocks are expected to become available in the coming years. We aim to reach that moment positioned for growth, expanding our role as one of the key polypropylene suppliers in South America.

That strategy includes preparing for investment in new capacity to capture opportunities arising from an improved national economy and enhanced raw material availability.