Braskem files for mediation process to negotiate debt with creditors

Brazil's resin and chemicals producer Braskem announced that the company has filed for an out-of-court mediation process and a request for a preliminary precautionary injunction for debt negotiation with its creditors and investors, it said on June 25.

The company attempts to reorganize its capital structure under the consent of its investors, with the "goal to preserve a stable environment for ongoing negotiations with its creditors, looking after a consensual, structured and ordered solution for its capital structure."

The negotiation also aligns with the company's liquidity and the global petrochemical industry's conditions, the company said.

Braskem is seeking support from creditors to initiate an out-of-court restructuring before its scheduled debt payments in July, according to four traders. If debt restructuring gets confirmed, it would allow the company to obtain a 90-day suspension of debt payments.

The company did not respond to a request for comment at the time of writing.

In a second announcement from June 25, the company said that it presented an initial restructuring proposal on June 11, which was rejected by investors. On June 19, Braskem received a counterproposal from the creditors, which the company refused on June 24. The parties involved still have not reached a consensus.

The full impact of an extrajudicial debt restructuring for Brazil's biggest petrochemical producer remains unclear to the industry. The company participated directly in the implementation of antidumping duties by Brazil on polyethylene imports from the US and Canada, as a measure to reduce imports entering the country.

Braskem is currently appealing the decision, as it considers the amount implemented by the government not representative of the market scenario.

The antidumping duty of $199.04/mt on US cargoes, the same value applied during the six months of the preliminary rate, is below the dumping margin of $734.32/mt calculated by the Brazilian government.

Meanwhile, total PE imports in Brazil from Jan-May 2026 were 3% higher than the same year-ago period, according to data from the Ministry of Development, Industry, Trade and Services.

In its first-quarter results, Braskem reported a decline in polymer exports, despite higher cracker utilization rates, as it focused on strong domestic demand.

According to Braskem's CEO, the company's operational rates could be higher if it had more liquidity and could convince stakeholders that access to additional working capital would generate cash.

Throughout March and April, Platts, part of S&P Global Energy, assessed domestically delivered polyethylene prices at record highs, as Braskem announced price increases totaling Real 8,000/metric ton for the period.

The increases were not fully implemented, according to market feedback. In May, the company rolled over prices, while in June it announced a Real 1,500/mt cut, the first decrease since the beginning of the Iran war.

"Braskem is desperate to sell now," said a Brazilian-based trader. "There is oversupply in Brazil for both imported and domestic materials."

Amid dull demand pressured by elevated inventories, Platts assessed June 24 the DAP Sao Paulo high-density film price Real 2,000/mt lower on the week at Real 11,000/mt. The linear low-density butene grade was impacted by a Real 3,100/mt on the week, reaching the lowest price across grades at Real 9,900/mt.