US polyethylene exports to Brazil remain heated amid uncertainties

This content is part of the WPC 2025 series in which we explore key themes from the 40th annual World Petrochemical Conference.

Polyethylene trade flows from the US to Brazil remained heated at the beginning of 2025 despite challenges stemming from price uncertainty and ongoing stalled demand.

Even though PE imports in Brazil decreased 4% in January-February 2025 in comparison with the same period of 2024, at 316,843 mt, the US remained the main supplier with 70% of total imports in Brazil, according to data from the Ministry of Development and Foreign Trade.

The data refers to high-density, low-density and linear low-density grades.

Throughout 2024, the US figured as Brazil's main PE supplier, accounting for 72% of the volumes, while total imports spiked 40% year on year.

Several market participants in Brazil believe US dominance in the polyethylene market can be reduced or even come to an end in the near future, as the country has taken actions in favor of the domestic industry.

After approving an import duty increase for 30 chemicals and polymers from 12.6% to 20% in Oct. 2024, Brazil opened in November 2024 a dumping investigation against US and Canada PE imports.

Market talk of the implementation of a preliminary antidumping duty in April have led to a reduced number of US imports in February and possible new suppliers.

"We are definitely studying other origins for PE," a Brazilian trader said. "We are already negotiating some initial volumes from the Middle East and also something from Asia."

The trader added that demand is flat in Brazil, mostly attributed to the slow process of substituting a relevant supplier to the market.

Platts, part of S&P Global Commodity Insights, March 12 assessed CFR Brazil PE prices down $15-$45/mt. HDPE film grade was assessed at $1,035/mt, while LLDPE butene grade was assessed at $1,035/mt and HDPE blowmolding at $1,045/mt, amid stalled demand.

Domestic prices from local resin producer Braskem remain elevated in comparison with imports, as the company aims to reduce production costs and improve market share, making Brazil dependent on imports.

"The correct decision to apply temporary increases in the import tax for 30 NCMs of chemical products is undoubtedly already having very relevant positive impacts," said André Passos Cordeiro, president of the Brazilian Association for the Chemical Industry, or Abiquim. "From October 2024 onwards, that is, during the period in which its effects are in force, there has been a 6.35% increase in domestic physical production in the last two months of the year."

Different sourcing

"It should be possible to find other suppliers outside of the US without too much complication," S&P Global Commodity Insights executive director of Chemical Consulting, Jesse Tijerina, said. "It is very likely that the supply from other sources could have the same technology from US products."

A second trader said they have not bought US PE for delivery to Brazil's main ports since December 2024.

"We are sourcing from Argentina, Colombia, Egypt and even Israel," the second source said.

Both Egypt and Israel have bilateral agreements with Brazil and are exempt from the 20% import duty.

"It is essential to keep in mind that the trade balance in chemical products is extremely favorable to the United States, which observed a surplus of nearly $8 billion in 2024 in trade with Brazil," said Cordeiro.

While the US exported $10.4 billion in chemical products to Brazil in 2024, it imported $2.4 billion originating from Brazil.

For this reason, several market participants believe retaliation will come from the US for other products if the AD duty is applied to PE.

"There will be reciprocity in tariffs," added Tijerina. "For now, [US President] Donald Trump is focusing on other countries but can attack other fields, like agricultural products and steel, for example."