News
25/11/24
Chancay Port takes center stage at APLA
Chancay Port takes center stage at APLA
Sao Paulo, 25 November (Argus) — The new $3bn Chancay Port in Peru could disrupt
polymers trade throughout Latin America, according to conversations at the 44th
Latin American Petrochemical Association (APLA) conference last week in
Cartagena, Colombia. Located 80km north of Lima, the Chinese-built port promises
to reduce shipping times for Chinese products to the region by up to 20 days,
thanks to its direct route across the Pacific Ocean. Chinese President Xi
Jinping inaugurated the port in Peru on 14 November. The port was a focal point
of discussions among producers and traders in Latin America, but especially for
those in the west coast of South America (WCSA), the first region to be possibly
affected by Chancay's operations. A polypropylene (PP) producer in Colombia told
Argus that the news is not good for them as it would be easy and fast to ship
Chinese PP from Chancay to Buenaventura, Colombia's most important seaport on
the Pacific Ocean. The company said it is trying to figure out how to deal with
the expected increase in resin imports from China. Several other regional resin
producers and traders are closely monitoring the situation, trying to strategise
their next moves. In the US, the largest polyethylene (PE) exporter to South
America, Chancay has already been causing concerns for local producers and
traders selling into the region, one source told Argus . The combination of more
Chinese PE arriving on South American shores and local governments placing
anti-dumping duties on US-produced, as is foreseen in Brazil in the short-term,
should lower US sales for the whole region, the source added. Asian resin is
already gaining market share in Peru. Currently, the country is the second
largest PP importer in South America by volume, and its imports had a
significant increase this year even before Chancay's inauguration. PP imports
climbed 32pc from January to October, with 90pc more purchases from
Asia-Pacific, whose market share expanded from 41pc to 58pc year on year. South
American purchases fell 7pc to 57,800t in the same period. Concerns were also
raised about the Chancay port being used to distribute Chinese resins to other
regional markets, including Brazil and Argentina, via smaller containerships
being sent through the Panama Canal. Chancay set to change routes The first
phase of the Chancay Port project, which began in 2021, features four berths and
a maximum depth of 17.8 meters, allowing it to accommodate ultra-large container
ships with capacities of up to 18,000 twenty-foot containers (TEUs). With a
projected throughput capacity of 1mn TEUs annually in the short term and 1.5mn
TEUs in the long term, Chancay Port is set to significantly impact maritime
routes from Asia to Latin America. Over 80pc of the project is already
completed, including the main quay structures finished earlier this year. Once
fully operational with its 15 docks, Chancay will be South America's first port
capable of handling ships too large for the Panama Canal. Additionally, China
plans to build a railway linking Chancay with Brazil, its largest Latin American
trade partner, later in the decade. The ownership of Peru's Chancay Port is
split between two major entities. Cosco Shipping Ports, a Chinese state-owned
company, holds a 60pc stake in the port. The remaining 40pc is owned by Volcan
Mining Company, a Peruvian firm. This collaboration is part of China's expansive
Belt and Road Initiative. By Fred Fernandes Send comments and request more
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