Brazil’s import tariff on polyethylene Tuesday decreased to 14% from 20%, a move that domestic distributors and traders say leaves them more optimistic about their market shares.
The government announced the 30% tariff cut in August. The government decided not to renew its import tariff, installed in 2012, to 100 products, including polyethylene grades such as HDPE, LDPE and LLDPE.
The government’s August decision was based on the high value of the US dollar against Brazilian currency, the real, which offered a natural protection for domestic industry.
Market participants are hoping Brazilian petrochemicals giant Braskem decrease its domestic prices, which in the last three months have systematically inched up.
“It is very hard to buy from Braskem because prices are very high,” a Brazilian distributor said. “Now, with more international competition, they might drop their prices a bit.”
Sources also said that loads of resins were bought in August and September but their entry into Brazil was scheduled for just after October 1 to avoid the higher tariff.
“I heard that tons of PE resin was already in the Brazilian ports, waiting for October to be unloaded,” the distributor said.
Source: Platts.com
