Brazil’s PE market worries about lack of AD duty officialization on US imports

More than two weeks after the Brazilian government approved the definitive antidumping duty on US and Canadian polyethylene imports, an official resolution has not yet been published in the country's Official Gazette, raising concerns among market participants about whether the tax can be increased.

On March 26, the Brazilian Chamber of Foreign Trade announced after a meeting that definitive duties were approved at the same levels as the preliminary taxes, which had previously expired on Feb. 28.

The duty on PE imports from the US, Brazil's main supplier, was $199.04/mt.

Since a publication has not yet been released, imports from the US have remained exempt from the tax since the end of February, according to sources.

The Brazilian Ministry of Development, Industry, Commerce and Services did not comment on April 10 on a possible deadline for the official resolution and did not confirm whether the duty is not being applied to imports from the US.

A day after the announcement became public, Braskem, the sole PE producer in Brazil, said during the company's fourth-quarter earnings call that it would appeal the decision. A dumping margin of $734.32/mt had been previously calculated for PE produced in the US, which should have been taken into consideration, according to Braskem's CEO.

"Braskem was very unlucky and had the wrong timing as the war in Iran came up," said a Brazilian-based trader, who considered the antidumping duty was not approved at higher levels due to price increases and issues in availability and logistics originated with the war.

"It makes us wonder if they can increase the duty until there is no resolution," said a second source.

Amid the uncertainties around the lack of a decision throughout March, PE imports from the US reached historically low levels, accounting for 34% of total imports in the month, down from 37% in February.

Although the total volume of imports entering Brazil from the US was higher in March than in February, neighboring Argentina and Egypt -- both exempt from a 20% import duty applied by Brazil -- saw a higher market share, decreasing participation from the US.