By Brazil Stock Guide – Braskem (BRKM3, BRKM5, BAK) has kicked off April with a R$6,500 per ton price increase on resins in Brazil, coupled with strict volume caps, in a move that reflects a sharp rise in feedstock costs rather than a recovery in margins, according to industry experts.
The new commercial policy targets polyethylene — one of the most widely used plastics in packaging — and is structured in three phases throughout the month. In the first week, alongside the increase, volumes were capped at 35% of clients’ monthly purchase intentions. In subsequent phases, prices will be defined later, with additional limits (35% and then 30%), highlighting the lack of short-term cost visibility.
The driver is upstream. Naphtha prices — the main feedstock for resins — surged more than 43% in March in the ARA market, according to Marta Drummond, Thermoplastics Director at MaxiQuim Group. “Even with large price increases, producers are not expanding margins — this is almost entirely cost pass-through,” she said to Brazil Stock Guide, noting that while Braskem does need cash, the immediate pressure comes from rising operating costs.
That backdrop helps explain the phased pricing structure. “International markets are behaving the same way, with weekly changes,” Drummond said. In practice, Braskem is shifting toward a more tactical commercial model — adjusting prices dynamically rather than committing to a monthly benchmark in a market without a clear anchor.
Supply constraints add another layer. Volume caps, already in place since March, are based on clients’ historical consumption and reflect structural limitations in the domestic market. “Local petrochemical supply covers roughly 50% of demand, so allocation is necessary to serve a broader client base,” she said. Import channels, typically a balancing mechanism, have also tightened, making it harder for buyers to source material abroad.
For investors, the key takeaway is that the move signals cost pressure, not margin expansion. The combination of higher feedstock prices and restricted volumes suggests that producers are trying to defend profitability rather than rebuild it. In that sense, April’s pricing strategy is less about pricing power and more about cost survival.
On the demand side, near-term destruction appears limited. The year started weak, but low inventories forced buyers back into the market as conditions began to improve in March. “Customers had to restock and absorbed the increases, regardless of supplier,” Drummond said. With inventories still lean and the geopolitical shock ongoing, price support is likely to persist — even if the conflict subsides, normalization should take time.
The move also comes against a shifting regulatory backdrop. Brazil recently imposed definitive five-year antidumping duties on polyethylene imports from the United States and Canada, maintaining tariffs of up to $238.49 per ton and $199.04 per ton, respectively. The measure reinforces a more protected domestic market at a time when global supply remains ample — but increasingly disconnected from local pricing dynamics.
In effect, Brazil’s polyethylene market is entering April with tighter supply, higher costs and no clear pricing reference — a combination that leaves both producers and consumers navigating in the dark.