Brazil's plastics industry expects investments of R10.5bn/yr ($1.8bn/yr) for the next few years despite potential tariff threats that could upend trading relationships, plastic industry association Abiplast said.
Factory expansions, advancements in sustainable packaging, new recycling technologies and enhancements in reverse logistics will fuel the investments, the association said at its Plasticos Brasil industry event.
Despite the optimism, Latin American polymers markets are experiencing a period of uncertainty caused by global market disruptions resulting from tariff threats by US president Donald Trump and other factors.
The threats of tariffs and retaliations has disturbed traditional plastic resin flows, resulting in lower prices throughout the region, with the effects most evident in the region's largest market, Brazil.
A global polymer trader told Argus that polyethylene (PE) prices have reached record lows, with high-density polyethylene (HDPE) blow molding grades dropping close to $900/t during the week, compared with the $1,040–1,080/t range on 27 February.
Other PE grades, as well as polypropylene (PP) prices, have followed a similar downward trend. On the other hand, offers of low density polyethylene (LDPE) and linear low density polyethylene (LLDPE) grades are limited, but the scarcity is not pushing these grades upward, according to the source.
Instead of taking advantage of discounts, many buyers are postponing purchasing decisions in anticipation of further price drops, leading to fewer deals.
Resin produced in the US and the Middle East is also being sold by Chinese traders at prices significantly lower than fresh offers from the original producers. These additional volumes, offered as re-exports, have depressed global prices, particularly in Latin America and especially in Brazil.
As a result, some traders continue to lose market share in Brazil, they told Argus. This trend is part of a downturn in the petrochemical industry's cycle, which some traders said will persist for at least a couple more years.
Despite these challenges, many market participants were emphatic that they closed many contracts and that they remain optimistic.
Regional developments
Brazilian chemical giant Braskem told Argus that Mexican joint venture Braskem Idesa's new ethane import terminal is scheduled to start up in May.
With the move, the Mexican JV will serve all of its PE plant's feedstock needs with ethane imported from the US. It remains unclear if the Trump administration's threats about imposing fees on Chinese-made vessels when they dock in US ports could impede Braskem's strategy in the region.
Braskem's first vessel, the Chinese-built 19,000t Brilliant Future, recently began transporting ethane to Braskem Idesa's complex from the US and a second vessel, with similar specifications and the same route, will be delivered in June.
Brazil's Unipar Carbocloro new $35mn plant in Camacari, in northeastern Bahia state, is gradually ramping up its capacity utilization as operations start, with an official opening scheduled for early April. The plant is designed to produce 10,000 t/yr of chlorine, 12,000 t/yr of caustic soda, 25,000 t/yr of hydrochloric acid and 20,000 t/yr of sodium hypochlorite.
Unipar also said that the gradual resumption of operations at its Bahia Blanca, Argentina, plant is progressing as planned. The plant went off line on 7 March because of torrential rains.
