Brazilian plastics industry warns of widespread cost pressures from ADDs

SAO PAULO (ICIS)–The plastics transformation sector in Brazil is facing increased costs for all major thermoplastic resins as antidumping investigations target imports from key supplier countries, the president of trade group Abiplast told ICIS.

Jose Ricardo Roriz said potential antidumping duties (ADDs) against polyethylene (PE) imports from the US and Canada, for which a final decision could be made as soon as this week, will raise cost pressures in the manufacturing sector.

The government body that focuses on overseas trade, the Foreign Trade Chamber (Gecex), will meet on 29 May and several sources expect it to make a decision on ADDs during the meeting.

The proposal for ADDs on US and Canadian PE was brought forward by polymers major Braskem in July 2024, prompting Gecex to open its probe in November 2024.

If approved, the ADDs will complete antidumping coverage on all principal thermoplastic resins used in manufacturing, including PE, polypropylene (PP), polyvinyl chloride (PVC) and polyethylene terephthalate (PET).

“The impact [of the ADDs on PE] will create pressure on costs, which ultimately affects not only the plastic transformation sector, but all industrial chains that use these products as inputs,” said Roriz.

If enforced, the duties will pose a significant challenge for the manufacturing sector which relies heavily on imported resins to produce a wide range of products including construction, automotives, packaging and consumer goods.

Roriz said the ADDs or other trade defense mechanisms are being misused and reiterated Abiplast’s staunch opposition to them.

“We are against these movements that turn trade defense instruments into simple tools for closing and reserving markets,” he said.

GROWING PROTECTIONISM
Gecex is investigating another proposal for PVC ADDs brought about by Braskem and caustic soda and chlorine derivatives producer Unipar, who claim they are subject to unfair competition.

In April, Gecex also began a probe into potential PET dumping from Malaysia and Vietnam, a proposal brought forward by Indorama and Alpek.

In the meantime, the Brazilian government re-imposed ADDs on US-origin PP last year.

In 2023, it reintroduced a tax break for the purchase of inputs by chemical companies, called REIQ, which was withdrawn by the previous centre-right administration.

In October 2024, the government approved higher import tariffs on dozens of chemicals.

Earlier this year, it also approved programs contemplating state subsidies or credit lines at a favorable rate for chemicals companies such as Presiq.