Sao Paulo—The Brazilian government has decided to reduce polypropylene import tariffs from 14% to zero on March 30, a move which comes after pleas from plastic industry players.
Minutes from a meeting held in the Foreign Trade Chamber, or CAMEX, on March 29 show that the decision is valid for three months and has a 77,000 mt cap for polypropylene homopolymer imports.Brazilian Association of Plastic Industry, or Abiplast, said the amount is proportional to total PP homopolymer volume imported in the fourth quarter of 2020. Abiplast pleaded for the reduction to the government.
The move comes at a time when the Brazilian market fears an outage of PP as local producer Braskem is about to start a planned maintenance in the petrochemical complex of Sao Paulo.
"We believe the initiative will open more options for PP entrance, although there is not that much availability in the world, and it will give us a sign that we can better supply our clients," president of Brazilian Association of Flexible Plastic Packaging Industry, or ABIEF, Rogerio Mani said.
According to Mani, PP demand is expected to remain high due to its usage on medical products, food packaging and other sectors tied to the combat of the COVID-19 pandemic.
A trader, however, sees the possibility of too much material arriving in the country at a time when it might not be needed.
"The shortage is happening now, next month and eventually in May, but until the product is bought and delivered, we will probably be in June or July. What I know is that every time this happens, a lot of material enters the country and is left over," the trader said.
S&P Global Platts data showed that imported PP are at record high levels in March. PP homopolymer was assessed March 24 at $2,020/mt and PP copolymer was assessed at $2,070/mt.
