Argentina
Waiting for the day after tomorrow
Argentina’s petrochemical sector looks to the future with optimism. Between Vaca Muerta, one of the world’s largest shale reserves, a sweeping free-market transformation, and nostalgia for Argentina’s golden years, the industry’s potential is clear. Yet the present brings pessimism. Vaca Muerta’s benefits for petrochemicals remain slow to arrive, economic reforms are incomplete, and many protections have vanished. There is also concern that, in any resurgence, other sectors – oil & gas or mining – may capture the rewards the chemical industry has long anticipated.
A recurring theme in GBR’s interview with Gabriel Rodríguez Garrido, executive director of the Argentina Petrochemical Institute (IPA), was the sector’s wait for ‘the day after tomorrow’: “Today, oil represents the most immediate opportunity for Argentina, offering a simple pathway from extraction to export. ‘Tomorrow’ it will be natural gas, with the country preparing for major exports starting 2027. ‘The day after tomorrow,’ it will be petrochemicals,” he said, offering a glimpse at both sides of the optimism and pessimism that define Argentine petrochemicals in 2025.
Vaca Muerta provides a unique, immediate and long-term advantage over Argentina’s regional peers in its petrochemical development. “The availability of low-cost gas from Vaca Muerta has strengthened the competitiveness of production, positively impacting the entire value chain, an advantage not widely shared across the region,” affirmed Jorge de Zavaleta, executive director of Argentina’s Chamber of the Chemical and Petrochemical Industry (CIQyP).
Long-awaited infrastructural development is arriving, with the Perito Moreno pipeline operational and the Vaca Muerta South pipeline (VMOS) set for inauguration in 2026. However, much work remains before the petrochemical sector can make full use of 300 trillion ft3 of competitive reserves. For now, logistics remain a major barrier: “While companies connected to Vaca Muerta enjoy advantages, most local producers must compete globally, facing high infrastructure, logistics, financial, and tax costs,” commented Ariel Stolar, director of petrochemicals for Pampa Energía, a major Argentine energy company.
“Argentina’s unique advantage lies in cheap gas and gas liquids, crucial for fertilizer projects, addressing shortages locally and the significant demand gap in Brazil.”
Ariel Stolar, Petrochemicals Director, Pampa Energía
Holding back the flood
Since his 2023 election, President Javier Milei has reshaped Argentina’s economy. The 2024 budget ran a surplus for the first time in 14 years, cutting social programs and subsidies. Inflation fell from 211.4% in 2023 to 117.8% in 2024, with 2025 projected at 30%. Mr. Milei’s removal of capital controls and reform of the cepo exchange rate strengthened the peso. In April 2025, he secured a US$20 billion IMF bailout. October midterms are seen as a key opportunity for the president’s La Libertad Avanza party to gain ground in Argentina’s legislature.
For chemical stakeholders, this ought to appear as broadly positive development, providing economic certainty and opening to new investment. And indeed: “Argentina’s economy is rebounding, driven by easing capital controls, lower inflation, and growing investor confidence,” said Matías Campodónico, president of Latin America at Dow, which operates a major chemical complex in Bahía Blanca, BA.
With greater stability established, there were even thoughts of next steps: “Argentina’s GDP is expected to grow around 4-5% in 2025, with inflation reasonably under control and a stable exchange rate. What is needed now is to reactivate consumption and to generate investment, particularly in heavy industries that add value to the economy,” assessed Gabriel García Polignano, executive director of Argentine chemical transporter Celsur Logística.
However, there is another side. Milei’s liberalizing agenda, inextricable from his administration’s ‘open for business,’ pro-market approach to Argentina’s economy, is welcoming new competition – and thus opening Argentina to the same cheap chemical imports that are overwhelming the region. It is a shift most firms simply were not prepared for, after many years of protectionist policymaking. “Over the past two decades, Argentina’s petrochemical industry operated largely within a closed market, limited by import and export restrictions. This shaped a sector focused more on local supply than global competitiveness,” explained IPA’s Rodríguez Garrido.
Celsur’s García Polignano expanded on this: “Argentina’s recent developments are resulting in increased international competition in the petrochemical and plastics industry, particularly from China. Previously, Argentine operators were insulated from this due to various currency and import controls.”
Similarly, Claudio Gorichón, CEO of chemical distributor Reno, which operates in Chile, Peru, Paraguay and Argentina, commented: “In Argentina, the investment environment is clearer than in the past, largely due to a more open economy. The primary challenge, however, stems from increased competition, as numerous large companies entering the market are driving down margins.”
In their rapidly changing economy and during a worldwide sector downturn, Argentina’s petrochemical producers have experienced a painful 2024 and 2025: “Global oversupply caused severe price declines, with major petrochemical companies reporting sharply reduced profits, consequential to falling market share and selling prices. Argentina was not immune,” bemoaned Javier Sato, CEO of Argentina’s sole polypropylene producer, Petrocuyo.
Zavaleta from CIQyP noted effects across the petrochemical and chemical industries: “Locally manufactured products are priced at import parity, resulting in a significant decrease in prices.”
Meanwhile, Milei’s revolution-in-progress leaves producers with obstacles still hanging over their competitiveness. “Argentina’s producers face heavy municipal, income, and transportation taxes that were manageable in a closed market but are unsustainable today. These costs erode margins and cause losses. Local producers are disadvantaged compared to foreign competitors without such tax burdens,” explained Pampa Energía’s Stolar.
Petrocuyo’s Sato also called for tax reform, and for the removal of plastic export tariffs: “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.”
Milei’s chainsaw approach worked rapidly at the macroeconomic level, but the precision required for his micro-refinements, inevitably, is taking time. Beyond the pure economics of production and pricing, IPA’s Rodríguez Garrido saw a need for wider reform: “Argentina’s petrochemical sector must continue evolving to stay competitive. The next wave will require stable rules, reliable access to infrastructure, and the development of skilled human capital to seize emerging opportunities,” he assessed.
Argentina’s petrochemical sector faces a moment of reckoning in 2025. President Milei’s push for competition has tightened margins, forcing firms to seek short-term relief while preparing for a brighter future grounded in the country’s newly established, more stable economic foundations.
“Argentina is in an exciting moment. With a more dynamic economy, the country will be better positioned to fulfill its great potential in mining and petrochemicals.”
Gabriel García Polignano, Celsur Logística
Opportunities across industry
There are still reasons for optimism. During the compilation of this chemicals report, another of GBR's teams visited Argentina to produce our first mining report there since 2017. Argentina’s mining sector has surged under Milei, aided by the Large Investment Incentive Regime (RIGI). In May 2025, Lundin Mining announced potentially the world’s largest copper discovery in three decades at Filo de Sol, San Juan province.
Without chemicals, it is impossible to efficiently turn mined ore into useful materials, opening up an all-new market for local producers in the coming years. “Mining in Argentina is a long-term opportunity for the petrochemical industry. While lithium’s price drop has slowed momentum, copper is gaining attention due to Argentina’s strong potential and the sector’s growing need for chemical inputs,” suggested Rodríguez Garrido from the IPA.
International distributors also see great potential in the sector, with Daniel Amador Torra, commercial director at Netherlands-based distributor KH Chemicals, commenting: “We see enormous potential in mining in Argentina and Ecuador. In both countries, mining operations are still relatively inefficient, and improving performance requires the use of specific chemical inputs.”
In a similar vein, Germán Torres, president of Brenntag’s Essentials business in Latin America, said: “We anticipate continued growth in the mining sector, especially as new opportunities emerge in Argentina and Brazil.”
Amid mining’s surge, some Argentine chemical producers expressed a feeling of being left behind. While Milei’s RIGI offers tax, customs, FX, and legal incentives, during this downcycle, the US$200 million minimum investment under RIGI was unattainable for petrochemical projects. By September 2025, just over a year after RIGI’s launch, seven projects – spanning oil, gas, renewables, and mining – were approved, totalling over US$13 billion. “There have been few petrochemical projects actively pursuing RIGI incentives. This does not mean submissions will not happen, but more stability is needed to attract greater foreign capital,” assessed Pampa Energía’s Stolar.
Petrocuyo’s Sato, meanwhile, preached patience, suggesting that Vaca Muerta’s riches would be a key enabler of petrochemical project scale: “Petrocuyo aims to be in a strong position when natural gas liquids become accessible. This will enable our participation in investment frameworks such as the RIGI,” he said.
Asked about the potential benefits of the RIGI for the petrochemical sector, IPA’s Rodríguez Garrido saw potential in fertilizer projects, which benefit from a large domestic agricultural market in Argentina, to serve as an initial step for petrochemical RIGI projects. “These require multi-billion-dollar investments, where frameworks like RIGI play a vital enabling role,” he said.
Finally, Rodríguez Garrido returned once again to his former theme: “I believe the key lies in first developing hydrocarbons – today oil, tomorrow gas – so that petrochemicals can emerge the day after. We are on that path,” he concluded.