Brazil’s Braskem denies linking PE price increases to antidumping expectations

SAO PAULO (ICIS)–Braskem has firmly denied it was preparing polyethylene (PE) price increases for June in anticipation of antidumping duties (ADDs) on US and Canadian imports, with a spokesperson at the Brazilian petrochemicals major calling such claims “absolutely unfounded”.

In a phone interview with ICIS, the spokesperson also rejected suggestions Braskem had already communicated potential price rises for June on expected ADDs.

The spokesperson later confirmed on Friday that Braskem’s PE prices would roll over in June from May.

The proposal to implement ADDs on PE was brought forward in 2024 by Braskem, who is the sole PE producer in Brazil. The company has had to grapple with higher production costs than peers in North America, where natural gas-based ethane is widely available and has allowed a revival in polymers manufacturing.

“The idea that we were putting up prices for May or for June based on a supposed decision regarding ADDs is absolutely unfounded. Braskem is not the one who sets the price: as the market knows, Braskem sets its prices accordingly to competitive market conditions rather than predetermined strategies,” said the spokesperson.

The company’s representative also deemed necessary to distinguish between general import duties, which affect all countries importing into Brazil, and ADDs, which in this case would only target two countries, if Gecex finally deems PE from US and Canada contravened free trade rules.

“For this particular case, it would not be the case that all imports would be affected – only the imports that are from the US,” concluded the spokesperson.

PE imports from the US and Canada represented in 2024 around 75% of all of Brazil’s PE imports, according to the ICIS Supply and Demand Database.

BUSY WEEK ENDS WITH A ROLLOVER
Brazil’s policymakers and polymers players leave behind a busy week in which political decisions get mixed with business planning, irremediably affected by the low operating rates at most Brazilian and Latin American chemical plants.

Hit by abundant and lower-priced imports, Brazil’s chemicals plants operating rates stand at around 60-65%, according to trade group Abiquim, which represents producers.

Braskem’s statement on Friday sought to clarify several points of the many published this week about Brazil’s trade policy, but mostly the claim by market players that Braskem had already decided to increase prices on expectations of ADDs being imposed on US material.

It stressed that any future price adjustments would not be related to antidumping measures, “because they are not in place”, and argued it was not aware yet of what way June pricing would go.

It has been an intense week for trade policymakers, with the foreign trade committee Gecex sharply increasing ADDs on US PVC from 8.2% to 43.7%, despite the US being only the second largest supplier to Brazil, well behind Colombia.

Meanwhile, Gecex postponed without explanation a meeting where it was expected to decide on imposing ADDs on PE imports from the US and Canada, planned for 29 May but rescheduled last minute, leaving Brazil’s PE market in uncertainty.

Latin America has been one of the most vulnerable regions hit by the global petrochemicals oversupply and low prices. As around half of Brazil and the wider region chemicals demand is covered by imports, it is global prices that dictate the domestic pricing policies – a quintessential ‘price-taker’ status.

After a considerable list of protectionist measures have been implemented in Brazil, fears among importers about rising input costs and overall national inflation rates are increasing.

Small and large manufacturers up and down the country, which depend on imports for their production, will now face higher bills due to higher import tariffs on several chemicals as well as several ADDs in place for petrochemicals.

However, Abiquim has said the measures’ influence on inflation would be minimal, adding they are sensible when taking into consideration that they would in part cushion the nation’s beleaguered chemicals producers from even lower operating rates or, in the worst-case scenario, plant closures.

Additional reporting by Bruno Menini