Demand for resins in Brazil up 3% on year in the Q1: Braskem

Sao Paulo — Demand for resins in Brazil in the first quarter of 2020 increased 3% year on year to 1.40 million mt and 7% quarter on quarter, Brazilian petrochemical producer Braskem said June 4.

Braskem said its crackers operated at a capacity utilization rate of 81%, up 3 percentage points quarter on quarter. Compared with Q1 2019, capacity utilization increased by 3 percentage points, Braskem said June 3.

The company's resin (polyethylene, polypropylene and PVC) sales in the Brazilian market totaled 882,000 mt, up 0.5% year on year and similar quarter on quarter.

"Market share has been stable or very similar to the past quarters," Chief Financial Officer Pedro van Langendonck Teixeira de Freitas said June 3. "Braskem sells at an import parity in Brazil, which is part of our strategy. We adjust the prices to accommodate or to reflect prices with international prices and exchange rate," Freitas said.

In Q1, Braskem exported 289,000 mt of resins, down 23.2% year on year and down 6.2% quarter on quarter, "due to the lower product availability of the petrochemical plants and the prioritization of sales to the Brazilian market," it said.

Of the total sales, 76% were sold in Brazil, 11% in the Mercosur region, 4% in Europe, 2% in Asia and Oceania excluding China, 3% in China, 1% in North America and 2% in others.

Braskem said its PVC plants operated at a capacity utilization of 65%, 14 percentage points lower than in Q4 2019, due to a planned outage at a PVC plant in Bahia state. In the Q1, Braskem imported 117,000 mt of EDC and 44,000 mt of caustic soda. The company PVC sales in the Brazilian market totaled 136,000 mt, 9% more than in Q4 2019. No year-on-year comparison was provided.

The company said its polyethylene sales were mostly destined to the food sector (29.2%), industrial (19.8%), retail business (10%). Polypropylene sales were focused on consumer goods (23.5%), food sector (22.5%), agricultural (17%) and automotive (9.5%). PVC sales was mostly destined to construction (60%), infrastructure (10.9%) and consumer goods (10.2%).

US

Braskem's polypropylene sales in the US totaled 368,000 mt, up 6.4% year on year and 3.4% quarter on quarter.

Its capacity utilization rate was 95%, 9 percentage points higher quarter on quarter and 4 percentage points higher year on year.

Braskem said demand for resins in the US was 1.3% higher quarter on quarter to 2.14 million mt, due to stocking from clients and higher medical and packaging demand, and 9.9% lower year on year, due to weak performance of the global economic related to the coronavirus pandemic.

"In the US, the expectation is for an improvement in June," said Freitas.

Mexico

The company's polyethylene sales in Mexico was 2% higher year on year at 213,000 mt, and also up 3% compared with the previous quarter.

Its capacity utilization rate was 86%, up 4 percentage points quarter on quarter and 7 percentage points year on year.

Braskem said demand for resins in Mexico increased 2% quarter on quarter to 543,000 mt and fell 0.4% year on year, due to higher stocking from clients.

"In Mexico, we had a very good month of April in sales, and in May it was a good month overall, so we do see an improvement," Freitas said.

Of the total sales, 51% were sold in Mexico, 18% in the Latin America region, 14% in the US, 3% in Europe and 3% in Asia. Freitas said fewer sales in the Mexican market has been offset by larger exports.

Europe

The company's polypropylene sales in Europe were steady year on year to 131,000 mt, and increased 8.3% quarter on quarter.

Its capacity utilization rate was 88%, up 1 percentage point quarter on quarter and down 2 percentage points year on year.

The company said demand in Europe was down 5.8% year on year to 2.56 million mt, but increased 9.1% compared with the previous quarter.