By Brazil Stock Guide – Braskem (B3: BRKM5; NYSE: BAK) reported lower petrochemical spreads in the fourth quarter of 2025, reflecting continued imbalance between supply and demand in global resin and chemical markets. In Brazil, the ethylene utilization rate fell to 59%, down 6 percentage points quarter-on-quarter and 11 p.p. year-on-year, mainly due to scheduled maintenance at the Bahia petrochemical complex and softer domestic demand. Resin sales in the country declined 6% from 3Q25 and 8% from 4Q24, as higher inventories along the value chain and seasonal slowdown weighed on volumes.
Spreads deteriorated across most regions. In Brazil, resin spreads dropped 13% quarter-on-quarter and 15% year-on-year in 4Q25. In the U.S. and Europe, the average polypropylene (PP) spread fell 4% versus the previous quarter and 10% year-on-year, pressured by increased imports into Europe and weaker polymer prices. In Mexico, the North American polyethylene (PE) spread declined 14% sequentially and 20% from a year earlier, as lower PE prices and higher U.S. ethane costs squeezed margins.
Mexico’s sharp recovery
Mexico stood out as the quarter’s positive surprise. Utilization rates jumped to 92% in 4Q25, from 47% in 3Q25, marking the highest level since early 2017. The rebound was supported by the normalization of Braskem Idesa’s operations after a general maintenance shutdown and a significant increase in imported ethane supply through the Terminal Química Puerto México (TQPM).
As a result, PE sales in Mexico rose 52% quarter-on-quarter and 14% year-on-year, reaching the strongest fourth-quarter performance since 2017. On a full-year basis, however, Mexican volumes were still down 16% compared with 2024 due to the production stoppages in 2Q25 and 3Q25.
Pressure on the cycle
In the U.S. and Europe, PP utilization declined to 71% in 4Q25, down 8 p.p. from 3Q25 due to scheduled turnarounds in Europe, though volumes increased 7% year-on-year on stronger U.S. demand.
Brent crude averaged US$64 per barrel in 4Q25, down 8% from the previous quarter and 15% from a year earlier, while natural gas prices rose 24% sequentially, altering feedstock dynamics. Across regions, resin and main chemical price references declined versus both 3Q25 and 4Q24, reinforcing margin compression in a still oversupplied global petrochemical market.
For 2025 as a whole, Brazilian resin spreads fell 6%, and spreads for main chemicals declined 13%, underscoring that the recovery of the petrochemical cycle remains gradual and uneven. Investors will now turn to Braskem’s upcoming earnings report for a clearer picture of EBITDA, cash generation and leverage trajectory in this challenging environment.