28/03/25
Brazil bets on plastics despite global uncertainties
Brazil bets on plastics despite global uncertainties
Sao Paulo, 28 March (Argus) — 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 could upgrade
it for PVC production someday. 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. By Fred Fernandes
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