Aggressively priced Brazilian polymer cargoes are likely to continue to appear in the global market in the near future. Low-priced polyethylene and polypropylene will continue to flow out of South America as long as the country’s economic struggles persist, as per sources in Platts
Traditionally a net importer of polymers, Brazil has become a much larger global player in recent months as domestic demand has fallen, leaving Braskem (the region’s largest petrochemical producer) in search of new markets. Domestic sales for PE, PP and PVC dropped 15% in Q2 from Q1 levels, Braskem said during its Q2 earnings call. The result has been an influx of exports throughout parts of Latin America and Asia, with effects also felt in the US, where sellers have had to contend with lower Brazilian prices that sources said have helped push a sliding market lower
“Brazil has complicated the situation,” a US-based polymer trader said. “If the economy was strong, Braskem would not be doing what they are doing now. “If the weak domestic demand persists, the export will continue happen in the same pace as of today,” a source familiar with Braskem’s business said Thursday
The increased volumes being sent to Asia at more competitive prices levels, have gotten the market’s attention. “There have always been some Brazilian cargoes, probably around 20,000 mt regularly into China, but somehow this time round, offers have been blown out of proportion,” an Asian producer source said
