Brazil's asphalt demand in 2026 is expected to surpass this year's level but is unlikely to reach the record set in 2024.
Brazil's asphalt market is on track to close 2025 with sales of around 2.5mn metric tonnes (t), according to industry estimates, down from a record 3.17mn t in sales in 2024.
Market participants expect a modest increase in 2026, with volumes projected to reach 2.6mn t. The anticipated growth is mostly related to Brazil's upcoming presidential elections, which traditionally spur government spending on roadworks and public infrastructure as part of campaign-driven investment cycles.
While election years typically boost asphalt consumption, market participants are not expecting a dramatic surge on par with 2024. Borrowing costs remain at their highest levels since 2006, a factor that can diminish private investment in roads.
Reduced budgets will also play a part in 2026 demand. Congress last week approved the annual budget bill, which reduced the transportation ministry's budget to R52.2bn ($9.4bn). Infrastructure spending will fall to R18.75bn in the coming year, down by about 36pc from R29.3bn in 2025.
Funds allocated for the National Department of Transport Infrastructure (DNIT) in September, which takes responsibility for most paving projects in the country, also decreased in comparison to 2025. The amount allocated dropped to R11.7bn from R12.1bn this year.
Budget cuts and delayed spending approvals reduced asphalt demand in 2025 by nearly 20pc from the year prior.
[The federal government froze R31.3bn from the annual budget]( https://direct.argusmedia.com/newsandanalysis/article/2696689), including R1.5bn from the transport ministry, which limited funds for highway maintenance and new paving projects.
This freeze, combined with the late approval of the 2025 budget law in April, restricted public agencies to minimal monthly spending early in the year and caused asphalt sales in the first quarter to drop by 15pc from a year earlier.
Production and imports of asphalt have mirrored the year's weak demand. Domestic output fell by 25pc in the first half of the year, with state-controlled Petrobras' Replan refinery posting the steepest decline, down by 41pc from a year earlier.
Sales during the same period dropped 23pc year on year, reinforcing a pessimistic outlook that emerged in May.
The decline in asphalt imports was less pronounced. Brazil imported roughly 290,000t in the first half, or around 8pc less than a year earlier, according to official data from ComexStat.
Although demand improved in the second half thanks to drier weather and increased DNIT spending, September volumes were still 25pc below prior year levels. Imports rose later in the year, but overall consumption remained subdued, shaped by fiscal constraints, delayed tenders and structural challenges in Brazil's infrastructure planning.
Elsewhere in South America
Argentina's asphalt imports in 2025 dropped around 9pc compared with the prior year, according to data from Kpler.
This was the continuation of a trend that began in 2023, when Argentinian president Javier Milei came to power. Asphalt imports this year are expected to be down by 50pc compared with 2022.
To help reduce the country's budget deficit, Milei froze all public works, including those involving paving activities. This rule remains in place, but the government has started to auction off more than 9,000km of highways under concession agreements. So far, two auctions have been launched as part of this program.
Argentina's asphalt imports for 2026 are expected to remain flat with this year.
In Chile, a country that imports most of its asphalt needs, imports have remained relatively stable for the past nine years. Only 2024 was an anomaly, when the country imported more than 150,000t of asphalt, a surge of almost 45pc compared with 2023.
Imports this year are expected to drop more than 30pc to 107,000t, roughly the same level as in other years.
Chile's new right-wing president, Jose Antonio Kast, will take over in 2026. And if he focuses on private investments rather than public works, asphalt imports could trend flat-to-lower in 2026.
