MRC -- Unigel, a significant player in Brazil's polystyrene (PS) production landscape, is gearing up to recommence its polystyrene manufacturing activities in Sao Jose dos Campos, Brazil, said Chemanalyst.
This strategic decision follows a temporary shutdown of the plant, which boasts an annual production capacity of 130 thousand tons of substation, initiated in July due to subdued market demand. Unigel is strategically timing the restart of operations to align with the escalating demand in the Brazilian polystyrene market, influenced by both seasonal factors and supply challenges.
The temporary halt in production in July was prompted by a period of low demand in the market, a circumstance that prompted Unigel to implement a strategic pause in its operations. With the plant's reinstatement, Unigel aims to capitalize on the evolving market dynamics and the heightened demand expected in the lead-up to the summer period in the region.
Notably, the Brazilian polystyrene market has encountered supply challenges in recent weeks, contributing to the urgency and importance of Unigel's decision to resume production. Additionally, Unigel's competitor, Innova, is currently operating at reduced capacity at its Manaus plant, attributing the decrease in output to logistical issues. This reduction in supply from Innova has further intensified the supply constraints in the market, creating an opportune moment for Unigel to re-enter the production landscape.
Earlier in the year, Unigel had temporarily closed its styrene production in Cubatao, Sao Paulo, Brazil, on June 12, for scheduled repairs. The styrene production facility, with an annual capacity of 120 thousand tons, underwent the shutdown for planned maintenance. While the exact duration of the repairs remains undisclosed, the decision was made for economic reasons.
The broader context of the Brazilian polystyrene and styrene plastics market reveals a notable increase in consumption. According to ScanPlast's analysis, the estimated consumption of polystyrene and styrene plastics in the initial eight months of the current year reached 379.32 thousand tons, reflecting a significant 7% growth compared to the same period last year.
Unigel and Videolar Innova emerge as the primary manufacturers of polystyrene in Brazil, occupying pivotal roles in shaping the dynamics of the domestic market. The strategic decisions and operational shifts undertaken by these major players significantly influence the overall supply-demand balance and market conditions.
Unigel's strategic move to resume polystyrene production in Sao Jose dos Campos underscores the company's responsiveness to market fluctuations and its proactive stance in leveraging opportunities. The decision to restart operations aligns with the changing dynamics of demand in the Brazilian polystyrene market, influenced by both seasonal patterns and supply challenges. Unigel's role, alongside other key players, continues to shape the trajectory of the Brazilian polystyrene and styrene plastics industry, contributing to its growth and resilience.
We remind, Unigel, the largest Brazilian manufacturer of nitrogen fertilizers, on Thursday announced the resumption of activities at a unit called Unigel Agro Sergipe, which produces urea and ammonia. The company said it scheduled the restart for September after a slight improvement in the outlook for the domestic petrochemical sector. The factory in Sergipe state was idled due to challenging market conditions, Unigel said. Another plant in Bahia state that was likewise idled will remain offline.