Brazilian chemical industry production increases by 6.35% following import tax hike: association

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Production in the Brazilian chemical industry increased by 6.35% since the government raised import taxes on 30 chemical products, the Brazilian Chemical Industry Association (Abiquim) said on Feb. 4.

The growth was recorded in the last two months of 2024. The tax increase took effect on Oct. 15.

Even though polyethylene, polypropylene, and polyvinyl chloride had their taxes raised to 20% from 12%, import volumes of these products did not decrease.

According to data compiled by Abiquim, chemical product imports increased by 11.5% in 2024 compared with 2023, totaling 65.3 million mt.

In its Feb. 4 statement, the association cited "predatory imports from the US and Asian origins," adding that competition with imported prices resulted in "a concerning rise in idle capacity" in the Brazilian chemical industry.

Price increases

The increase in the import tax was followed by a rise in prices of both imported and domestic PE in Brazil.

Platts, part of S&P Global Commodity Insights, assessed high-density PE film at $1,080/mt CFR Brazil on Feb. 26, up from $1,030/mt before the tariff increase in October.

Meanwhile, domestic prices of HDPE film rose to Real 11,400/mt on Feb. 29 from Real 10,000/mt on Oct. 14. For March, local producer Braskem has announced an additional increase of Real 200/mt after an increase of Real 600/mt in February.

The same effect was observed in the PVC market. Platts assessed spot prices at $890/mt CFR Brazil on Feb. 26, up from $880 on Oct. 9. Domestic prices were indicated at Real 6,000/mt on Feb. 20, up from Real 5,674/mt on Oct. 8.