Traders and distributors expressed concern over the credit lines and delinquency rate for Brazilian resin buyers, on the sidelines of the 35th annual Latin American Petrochemical meeting in Cancun, Mexico.
"My main concern is not how weak is the [Brazilian] real against the US dollar, but how unsteady is the currency fluctuation," a US-based trader said.
The Brazilian real was at 3.79 versus the US dollar early Tuesday, and appeared to be stabilizing in recent weeks.
"The currency has been quite stable in the last month and it is good. But the delinquency rate that happened a few months ago hurt the market," the US-based trader said.
According to sources, many buyers imported material in US dollars when the real currency was unsteady -- mainly during Q2 and Q3 -- and ended up with debt that was hard to pay on time, increasing the delinquency rate in Brazil.
That rise in the delinquency rate was now hitting the resin market in Brazil.
"Some insurance companies had contacted us stating that in 2016 they will drop the credit lines for some of our Brazilian clients, and this is not good news," the US-based distributor said.
"We don't know if this will happen for sure, but if it does, it will prevent more investments and production from growing in Brazil," a Brazil-based distributor said.
