Domestic polyethylene prices in Brazil have reached record high in October and rose more than 55% in all grades since January, according to S&P Global Platts data.
The main petrochemical producer in Brazil, Braskem, has been raising prices continually since July, after keeping numbers mostly stable during the first half. In October, the company established its highest increase so far, of Real 900/mt for all polyethylene resins.
HDPE film prices were assessed on Oct. 7 at Real 8,300/mt, the highest since July 2018, when prices were at Real 7,600/mt. Compared with January, prices are up 63%.
LDPE got 69% more expensive at the same comparison basis, the biggest variation of all resins covered by Platts in Brazil. The polymer was assessed on Oct. 7 at Real 9,300/mt.
"I have never seen prices at these levels. It is unbelievable," a distributor said.
According to a Braskem source, the main drivers for the hikes are the consistent devaluation of local currency real against the dollar and imported PE prices, which are going higher amid lower availability.
The exchange rate in Brazil started the year at Real 4.03/$1 and ended the last trading session on Oct. 7 at Real 5.60/$1. This gives the Brazilian Real a 39% devaluation since January.
Locally, Braskem saw renewed record-high volume sales in August and September with normalized capacity utilization rate, but not enough to fully supply the domestic market.
"The scenario between supply and demand is very tight and Braskem is having difficulties in serving the market," a converter said.
The high demand is translating into higher imports volume, even with a strong dollar. Brazilian government data show that HDPE and LDPE import volumes combined are 8% higher on the year until September compared with the same period in 2019.
Still, Brazilian market participants have been reporting difficulties in finding resins since late July. In the US, Brazil's main PE supplier, the market is still showing limited quantities of polymers, which prompted prices up in the past months.
Hurricane Laura put several PE and PP plants under force majeure from August to September and disrupted production. This week, hurricane Delta is expected to remake Laura's path and, despite not being as powerful as Laura, it will likely held off Lake Charles' plants restarts.
