Brazil Petrochemicals Report Q3 2016

Date: July 27, 2016
Pages: 74
US$ 1,295.00
Report type: Strategic Report
Delivery: E-mail Delivery (PDF)
ID: BC7259253FBEN

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Includes 3 FREE quarterly updates

BMI View: Cheaper oil has lowered the cost of naphtha, Braskem's main raw material, thereby improving competitiveness. However, the Brazilian petrochemicals industry still endured one of the worst years in two decades in 2015 due to the domestic economic recession. Recessionary trends are expected to continue in 2016, severely affecting petrochemicals end markets. Margins will be determined by success in reducing electricity costs and the price of oil, which has a direct bearing on the cost of naphtha. The naphtha-ethane price differential will have a major impact on Brazil's ability to compete with new ethane-based production in the US.

Chemicals accounted for 24% of imports and 7% of exports in the January-April 2016 period. The chemicals trade deficit reached USD6.4bn in the first four months of 2016, down 18.4% y-o-y. Imports fell 14.6% y-o-y to USD10.2bn while exports fell 7.5% to USD3.8bn. In the 12 months to April 2016 the trade deficit was at USD24bn, the lowest level since 2010 when it fell to USD20.6bn. Thermoplastic resins exports rose 39.2% y-o-y to USD766.8mn in the first four months of the year, while fertilisers dropped 3.2% y-o-y to USD1.5bn.
  • In terms of end markets, the domestic market will contract. We remain bearish on the country's vehicle production outlook in 2016 as domestic sales prospects remain weak and worker dissatisfaction over working hours, pay and lay-offs leads to further industrial disputes and production cutbacks. As a major petrochemicals consumer, through the use of polymers and rubber in fittings and trimmings, the industry's decline is a major loss for the petrochemicals market. Brazil's construction sector will remain in recession in 2016, which will negatively affect construction-related polymers, particularly polyvinyl chloride.
  • Petrobras indicated that it requires an additional USD5.3bn to complete the troubled Comperj project, including USD2.8bn for the refinery and USD2.5bn for the natural gas processing unit. Originally budgeted at USD6.1bn, the complex is now expected to cost USD19.6bn. In March 2016, it was said the project would be completed in 2023, 15 years after construction began.
  • Brazil remains in third place in our Americas Risk/Reward Index ranking, but its score has fallen 0.8 points this quarter due to the deteriorating market position, putting it at level with Mexico.
BMI Industry View
Operational Risk
Industry Forecast
  Table: Brazil Petrochemicals Sector - Historical Data And Forecasts, 2012-2020
Macroeconomic Forecasts
Economic Analysis
Industry Risk/Reward Index
Americas Petrochemicals Risk/Reward Index
  Table: Americas Petrochemicals Risk/Rewards Ratings
Market Overview
Industry Trends And Developments
Company Profile
  Table: Braskem Financial Results - BRLmn
PetrĂ³leo Brasileiro (Petrobras)
Regional Overview
Americas Overview
  Table: Planned Cracker Projects
Global Industry Overview
Demographic Forecast
  Table: Population Headline Indicators (Brazil 1990-2025)
  Table: Key Population Ratios (Brazil 1990-2025)
  Table: Urban/Rural Population & Life Expectancy (Brazil 1990-2025)
  Table: Population By Age Group (Brazil 1990-2025)
  Table: Population By Age Group% (Brazil 1990-2025)
  Table: Glossary Of Petrochemicals Terms
Industry Forecast Methodology
Risk/Reward Index Methodology
  Table: Petrochemicals Risk/Reward Index Indicators
  Table: Weighting Of Indicators
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Brazil Petrochemicals Report Q4 2015 US$ 1,295.00 Oct, 2015 · 77 pages
Brazil Petrochemicals Report Q1 2016 US$ 1,295.00 Dec, 2015 · 75 pages

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