Could Latin America become the New Clothing/Footwear Mfg center, displacing China ?

(edited)

U.S. petrochemical plants along the Gulf Coast have steadily been coming online.  Additional plants are getting the approval.  The demand for ethylene is projected to triple over the next 6 years. Ethylene is derived from manufacturing naphtha, Natural Gas, Natural Gas Liquids.  All of which plays right into U.S. Shale Miracle. Industrialized countries have traditionally mfg ethylene and its end products MEG and PET locally. US now exports about 500K bbls/day of Ethylene. The most cost effective method is by using Ethane a by-product of Natural gas (dry and wet).  This is why upwards of 17 petrochemical plants have been built in the last 6 years in the U.S. gulf states and Pennsylvania.  

NOW China and Asia in general WANT U.S. ETHANEExport capacity is being built to accommodate their need. China invented a process to mfg. ethylene from coal.  Really.  But is not cost competitive with using Ethane for feedstock.

Latin America has seen the clothing and footwear companies increased manufacturing. The U.S. and China trade war has seen numerous companies now interest Ed in expanding or moving to Latin America.  Other industries could follow.  

The U.S. petrochemical industry is ready to meet the local Latin America demand. 

China's loss. 

No wonder Trump no longer in a hurry to sign a China deal.  The bastard is making them sweat.

Latin America won't displace China but will steal portion of its growth.

Edited by Falcon
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21 minutes ago, Falcon said:

U.S. petrochemical plants along the Gulf Coast have steadily been coming online.  Additional plants are getting the approval.  The demand for ethylene is projected to triple over the next 6 years. Ethylene is manufactured from naphtha, Natural Gas, Natural Gas Liquids.  All of which plays right into U.S. Shale Miracle. Industrialized countries have traditionally mfg ethylene and its end products MEG and PET locally.  The most cost effective method is by using Ethane a by-product of Natural gas (dry and wet).  This is why upwards of 17 petrochemical plants have been built in the last 6 years in the U.S. gulf states and Pennsylvania.  

NOW China and Asia in general WANT U.S. ETHANE.  Export capacity is being built to accommodate their need. 

Latin America has seen the clothing and footwear companies increased manufacturing. The U.S. and China trade war has seen numerous companies interest in expanding or moving to Latin America.  Other industries could follow.  

The U.S. petrochemical industry is ready to meet the local Latin America demand. 

China's loss. 

Dont forget that foreign companies/countries are also investing heavily along the USGC mainly, for petchems and other manufacturing that uses natgas and ngls etc as feedstock.

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I think that it would be more economically feasible for the clothing/footwear industries presently located in China to simply relocate to other Asian countries in the region. 

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On 5/29/2019 at 12:01 AM, Douglas Buckland said:

I think that it would be more economically feasible for the clothing/footwear industries presently located in China to simply relocate to other Asian countries in the region. 

On that note, manufacturing went to China because China has an intelligent, disciplined population led by a stable government.  Latin America has no such thing.  I.e. low hourly wages are irrelevant if workers are slow, unreliable, and corrupt. 

At first, manufacturing will spread to other countries in SE Asia because their workers offer decent value.  In the long run, automation will cause the cost of global logistics chains to exceed the differential cost of labor,  and manufacturing will return to developed nations. 

E.g. clothing was outsourced because no one could automate sewing, and that made it labor intensive.  When computer scientists and engineers solve that problem - and they're working on it as we speak - textile industries will rapidly locate to wherever demand exists. 

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