Viewpoint: Brazil tightens grip on polymer imports

: Petrochemicals
25/12/29

Brazil's growing dependence on polymer imports and its record trade deficit in 2025 have placed domestic producers and policymakers under mounting pressure, prompting a wave of protective measures, a trend expected to continue into 2026.

Conditions for Brazilian polyethylene (PE) producers remained as challenging in 2025 as in 2024. PE imports totaled $1.49bn in January-November, only 1.5pc lower than the $1.51bn in the same period of 2024, while volumes rose slightly to 1.34mn metric tonnes (t) from 1.32mn t, according to Comexstat data.The marginal improvement in value reflects global price decreases rather than any structural shift in sourcing, underscoring persistent pressure on domestic producers.

The backdrop to these difficulties was 2024, when Brazil posted its largest-ever annual polymer trade deficit. Imports of PE, polypropylene (PP) and polyvinyl chloride (PVC) surged as global supply expanded and domestic capacity remained constrained. Even after Brazil raised overall polymer import tariffs to 20pc from 12.6pc in October 2024, inflows continued to climb. These developments triggered the protective measures in 2025 that are likely to intensify in 2026.

Braskem, Brazil's leading producer, reported a further $51mn in losses in the first nine months of 2025, fueling calls for government intervention. In response, Brazil imposed provisional anti-dumping duties on US and Canadian PE in August 2025 — $199.04/t for US-origin and $238.49/t for Canadian-origin resin — valid for six months. These measures were introduced by foreign trade council Gecex/Camex and are now under review by the department of trade defense Decom, with a final decision expected in early February.

So far, these measures have had limited impact because preliminary duties can be suspended or refunded if overturned. Final duties, also expected in February, would lock in higher costs permanently, reducing pricing uncertainty and forcing buyers to seek alternative supply sources. Market participants are monitoring whether permanent tariffs will alter procurement strategies, particularly for large converters.

Despite the new anti-dumping duties, the US remained Brazil's top PE supplier in January–November 2025, accounting for 66pc of volumes, down from 71pc one year earlier. Argentina expanded its share to 14.8pc from 10.9pc, with shipments rising to 199,415t. Canada maintained a smaller share, while other suppliers such as Colombia and Mexico continued to serve niche segments.

Beyond PE, Brazil raised anti-dumping tariffs on US suspension-grade PVC to 43.7pc in May 2025, up from 8.2pc previously. This move effectively displaced US suppliers, opening space for Colombian and Argentine producers to increase their presence in the Brazilian PVC market.

PP imports also remained elevated through 2025, with volumes stable from 2024 despite tariff adjustments. Domestic PP production continued to operate below capacity, reinforcing Brazil's reliance on imports for key downstream sectors such as packaging and automotive components.

Looking ahead, Brazil's trade defense momentum is set to intensify through 2026. Participants expect the government to maintain a protectionist stance to restore competitiveness and narrow the polymer trade deficit. Additional investigations into other polymer grades and potential safeguard measures are under discussion. For downstream users, the evolving tariff landscape will require adjustments in sourcing strategies and cost management as Brazil seeks to rebalance its polymer markets.

By Fred Fernandes and Isabela Mendes

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25/12/31

Viewpoint: US methanol to further displace Trinidad

Houston, 31 December (Argus) — US methanol producers are expected to further expand global market share while simultaneously eroding Trinidad and Tobago's share as the island nation contends with unreliable feedstock availability. Trinidad and Tobago's mature natural gas fields are in significant decline, and natural gas availability has incrementally shrunk during the last 15 years, according to the Caribbean country's National Gas Company (NGC). Natural gas is a critical feedstock for methanol production, and the decline in natural gas output from the twin island nation has cut methanol capacity since 2009. US methanol production capacity concurrently expanded with the decline in Trinidad output, and major producers continue to invest in US assets to further expand market share — a trend expected to continue in 2026. Trinidad and Tobago is a major supplier to US east coast distributors and is anticipated to lose market share to US producers. East coast importers and distributors from January-September took in 221,079 metric tonnes (t) of methanol from Trinidad and Tobago, marking a 20pc decrease from average shipments during the same nine-month period from 2021-24, according to government data collected by Global Trade Tracker (GTT). Lower imports from Trinidad and Tobago raised the cost of transportation by trucks and railcars on the US east coast and widened the differential to the US Gulf coast. The average price premium east coast truck and railcars commanded over the US Gulf coast has jumped fourfold since 2021, and that widening spread could incentivize domestic suppliers to further displace methanol imports with domestic production. Additionally, the US could also expand its methanol presence in Europe. US methanol exports to Europe stood at 1.7mn t during the first nine months of this year, up by 39pc over the same period of last year and 200pc higher than in 2021. Meanwhile, exports from Trinidad and Tobago to Europe fell by 41pc to 1mn t from January-September 2025, according to GTT. Trinidad's natural gas future Operators in Trinidad and Tobago are investing in upstream projects to increase natural gas production, but these efforts will likely only offer a slight boost and short-term feedstock stability. One project headed by UK-based BP will deliver about 250mn cf/d to midstream and downstream consumers in Trinidad. Natural gas flows will start in April 2026, the company said earlier this year. Despite this project, and others under development, natural gas supply will remain tight through 2027, sources said, keeping methanol operations curtailed during the next two years. Long-term growth depends on cross-border natural gas development with Venezuela, which has large reserves but faces geopolitical tension with the US. While Trinidad's natural gas production is not expected to run dry soon, more is going to higher priced molecules, such as liquefied natural gas (LNG) or ammonia, instead of methanol — a trend that has defined the shifting supply balance from Trinidad during the last 15 years. Natural gas production peaked at 4.3 Bcf/d in 2010, but fell to around 2.5 Bcf/d in 2025, according to NGC. Feedstock natural gas deliveries to Trinidad's methanol assets fell simultaneously with sliding output, with January-to-June deliveries this year down by 11pc to 452mn cf/d compared to the January-June period last year, NGC data showed. These cuts and the sporadic nature of the islands' natural gas supplies have slashed Trinidad's 8mn t/yr methanol capacity to an estimated 4mn-5mn t/yr of production, just over half of total operational rates. By Steven McGinn Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: US butadiene demand cools, exports climb

25/12/24

Viewpoint: US butadiene demand cools, exports climb

Houston, 24 December (Argus) — Price support for the US butadiene (BD) market may remain under pressure next year from oversupply concerns, as market participants contend with weak demand, while volumes are increasingly redirected to the seaborne export market. Market participants told Argus that they expect their annual term commitments to stay unchanged in 2026, though some reductions are possible as derivative nameplate capacity shrinks. Most buyers and sellers anticipate demand conditions comparable to this year, which proved weaker than expected, as tariff- and other trade-related headwinds weighed on an already challenging market environment. The permanent closure of three derivative sites in 2025 — Lion Elastomers' synthetic rubber plant in Texas, Ineos Styrolution's acrylonitrile-butadiene-styrene plant in Ohio and Denka Performance Elastomer's chloroprene rubber plant in Louisiana — underscores broad weakness across a host of downstream segments. This follows the earlier shutdown of Invista's adiponitrile plant in Orange, Texas, in 2023. These four assets account for 17pc of US BD consumption capacity lost between 2023-2025, according to Argus Butadiene Analytics data. A combination of rising raw material costs and capital expenditures, low demand and regulatory burdens were cited as severely impacting the profitability of chemical operations. Part of the challenge, in tandem with those factors, stems from an influx of low-cost imports, primarily from Asia-Pacific. The US tariff regime, rolled out in April, has not yet lifted demand and, in some cases, eroded output among US derivative manufacturers. In fact, the White House's trade policy shifts have coincided with the shutdown of BD-based polymer facilities and an absence of new builds. The Institute for Supply Management's purchasing managers' index (PMI) fell to 48.2 in November, its ninth consecutive drop. Chemical products, plastics and rubber products were among the industries reporting contraction. Efforts to stimulate domestic production have failed to deliver a significant upside, leading some US suppliers to more closely match their contract nominations to netback export values. This dynamic has helped to reposition the US as the lowest-cost region, replacing Europe's long-standing advantage. The Argus prevailing US BD contract price (CP) for December settled at 29.25¢/lb ($645/t), the lowest level in over two years. December's settlement shed 19.75¢/lb year-to-date, or 40pc, the tenth consecutive decline. The US BD spot price on a fob basis followed the same pattern, remaining at a discount to the CP in nearly all months over the same period. Market fundamentals reshape trade flows A decrease in US demand for BD has pushed suppliers to lean more heavily on exports to bridge structural gaps, though this strategy has contributed to downward price pressure. US BD exports climbed to record levels this year, totaling 142,100t year-to-date through November, up by 66pc from 85,400t during the same period last year, Argus data shows. Nearly 54pc of these exports headed to Asia-Pacific, the world's largest consuming region. Mexico accounted for 44pc, a trend supported by shifting derivative production from the US to Mexico. Europe received the smallest share at 2pc, although volumes could rise as traders capitalize on the logistical advantages of co-loading BD with ethylene shipments bound for the Mediterranean. On a monthly contract basis, US BD prices have sustained a better value option than rival European supplies for delivery into northeast Asia. In December, the US CP maintained a discount of about $200/t compared with Europe's monthly contract price. This was wider than the estimated mid-$100s/t discount on a spot basis. Despite the US' low-cost position and growing exposure to seaborne exports, Europe has shipped almost twice as much volume to Asia-Pacific from January-November this year. A key driver of this trend is China's taxes on US imports, which gives other regions preferential market access. There have been discussions of exporting tons on a term basis to northeast Asia, but the US would have to compete for business with western Europe, Brazil and intra-regional suppliers in Asia-Pacific. The US will continue to prioritize spot shipments elsewhere in Asia-Pacific, primarily South Korea and Taiwan, unless China reverses course and grants tariff waivers on US-origin imports. By Joshua Himelfarb Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: European EO faces structural oversupply

25/12/24

Viewpoint: European EO faces structural oversupply

Amsterdam, 24 December (Argus) — Europe's ethylene oxide (EO) market is heading into 2026 with supply outstripping demand. Producers are shifting towards merchant sales rather than captive use for commoditised derivatives. Downstream derivatives such as ethylene glycols and ethanolamines remain under pressure from imports and weak regional demand. Suppliers are chasing purified EO sales, which offer better returns and face little competition from overseas players. EO's hazardous nature makes it difficult to transport, keeping supply local and largely tied to long-term contracts. Merchant EO demand in Europe is flat at best. This is increasing competition for volumes among producers and putting pressure on "adders" in formula-based contracts for next year. Surfactants, which account for most merchant EO consumption, have held up better than other downstream sectors, supported by steady demand from personal care, household and industrial cleaning applications. But polyether polyols remain exposed to sluggish construction and automotive markets, while cautious consumer confidence is curbing demand for durable goods. Both sectors also face pressure from competitively priced imports, further weighing on domestic margins. Despite the challenging market environment, EO-related capacity rationalisation has been limited in Europe this year. Clariant confirmed in September that it will decommission one of its two EO units at Gendorf, Germany, by the end of the year. But the closure is not expected to tighten merchant EO availability, as the unit is linked to ethylene glycols production rather than purified EO, market participants said. Ineos is investing €250mn to modernise its steam cracker at Lavera, France — a site previously viewed as vulnerable — signalling confidence in the long-term viability of the complex, including EO and derivatives operations. European EO producers' resilience could be tested in 2026. The European Commission has proposed eliminating customs duties on a wide range of US industrial goods under the EU-US trade deal, a move broadly supported by EU member states. The proposal still needs European Parliament approval, but if implemented it could weigh on domestic producers' profitability. EU countries added a bilateral safeguard mechanism to the draft law, to be activated if significant import increases and serious injury to domestic producers follow tariff concessions. The US is a major supplier of EO derivatives, including ethylene glycols, ethanolamines and E-series glycol ethers to the EU, and zero tariffs could open up arbitrage opportunities for spot imports more frequently. Monoethylene glycol will remain somewhat protected from an influx of imports by existing anti-dumping duties on US and Saudi material, effective until 16 November 2026. European producers are preparing for a sunset review of the measures, and any changes could quickly reshape the competitive landscape. Market participants are also watching the impact of other anti-dumping investigations in the polyethylene terephthalate (PET) value chain — probes into PET imports from Vietnam, with pre-disclosure expected on 24 December, and into purified terephthalic acid (PTA) imports from South Korea and Mexico due to be finalised in 2026. The commission imposed definitive anti-dumping duties on Chinese PET imports in April 2024, but this has done little to stem the flow of low-cost imports into Europe, with trade shifting to other origins instead. Protectionist measures offer temporary relief but do not address Europe's structural disadvantages — high energy costs and carbon reduction obligations. European MEG demand is shrinking because of ongoing downstream closures, with a Dutch facility permanently closed in 2024 and a Spanish producer ceasing output in 2025 amid high regional production costs and pressure from imports. Further PET capacity shutdowns are anticipated next year if challenging market conditions persist. By Liana Minihan Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Japan’s petchem firms finalise polymer integration plan

25/12/24

Japan’s petchem firms finalise polymer integration plan

Tokyo, 24 December (Argus) — Japanese petrochemical producers Sumitomo Chemical and Prime Polymer have finalised their contract to integrate Sumitomo's polyolefin production businesses with Prime Polymer, aiming to enhance the competitiveness of their polyolefin businesses. Prime Polymer — a joint venture between petrochemical firm Mitsui Chemicals and refiner Idemitsu — will merge Sumitomo's domestic polypropylene (PP) and linear low-density polyethylene (LLDPE) businesses on 1 July 2026, the companies said on 24 December. Sumitomo's PP and LLDPE production-related assets will be integrated into Prime Polymer later on 1 April 2027, as the system integration will take some time after the business merger, the companies said. After the integration, Prime Polymer will have a production capacity of 1.59mn t/yr for PP and 720,000 t/yr for PE in Japan. Mitsui will hold a 52pc share in Prime Polymer and Idemitsu will have 28pc, with Sumitomo newly acquiring 20pc in exchange for the integration of its polyolefin businesses into Prime Polymer. Currently Mitsui and Idemitsu hold a 65pc and 35pc share in Prime Polymer respectively. Prime Polymer has a production capacity of 1.26mn t/yr for PP and 550,000 t/yr for PE in Japan currently. Demand for domestically produced polyolefins will continue to decline because of shrinking domestic demand, population decline and changing lifestyles, the companies said. The companies aim to optimise their polyolefin businesses and achieve annual cost savings of over ¥8bn/yr ($51mn/yr) through this business integration. Idemitsu, Mitsui and Sumitomo first announced this integration plan in September. By Kohei Yamamoto Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

Viewpoint: New PE capacity favorable to buyers in 2026

25/12/23

Viewpoint: New PE capacity favorable to buyers in 2026

Houston, 23 December (Argus) — With 2mn t/yr of new US polyethylene (PE) capacity set to start up in the second half of 2026, pricing power may stay in domestic buyers' hands for much of the year, particularly if producers struggle to find homes for the new resin. Golden Triangle Polymers, a joint venture between Chevron Phillips Chemical and QatarEnergy, is expected to start up 2mn t/yr of high density polyethylene (HDPE) capacity in Orange, Texas, by the middle of next year, aimed almost entirely at the export market. While the US remains a low-cost producer, the new volume will have to compete with growing global supply, including around 4mn t/yr of new PE capacity projected to start up in Asia in 2026. With the key China market becoming more self-sufficient, it may be difficult for the global market to absorb the new capacity. There are some potential bright spots for US producers in the global market, including the potential for a free-trade agreement with the EU, which would further open up EU countries for more US volume. But if enough new export destinations are not found, market participants have said material will back up in the US/Canada domestic market, keeping supplies loose, and making it difficult for producers to raise domestic contract prices. As new PE capacity has been added in the US, the percentage of sales going to exports has continued to rise. In 2022 — prior to the start-up of more than 3.3mn t/yr of new capacity from Shell, Baystar, Nova and Dow that took place from 2023 through 2025 — total exports averaged 39pc of total sales, according to data from the American Chemistry Council (ACC). In 2025, year-to-date through November, exports averaged 48pc of total sales. New capacity is one factor that can cause export prices to decline, as supplies increase in the market. As an example, Dow started up its new 600,000 t/yr HDPE/LLDPE swing unit in Freeport, Texas, in June 2025, with the full ramp-up beginning in July. From July through 12 December, US LLDPE butene export prices declined by around 18pc. Over the same period, US/Canada contract prices held steady every month from July through November, with expectations that December contracts also may settle flat as three US producers have not announced an increase for the month. There were a variety of reasons for the flat contract pricing in the second half of 2025, including weak domestic demand. But one main factor was plentiful supply, and low export prices, as US/Canada producers fought for market share in the global market. "[The US] is so over-supplied," said one US PE buyer. "The economic factors are in the buyers' favor right now." For January, most US/Canada producers have announced price increases of between 5-7¢/lb. Suppliers are expected to push hard for a price increase in January, with many market participants expecting some level of a price increase to stick in the first quarter. But with little expectation for improved demand in 2026, buyers, distributors and traders said they expect the market to remain well-supplied, which will make it difficult for further contract increases. "I think we will continue in a buyers' market for a couple more years," said one US trader. Producers are wary about global oversupply, but believe there will be some additional capacity rationalization in other regions that will help create more export opportunities. Geopolitical events such as the Ukraine-Russia conflict, Venezuela embargoes, trade tariffs, and anti-dumping duties have contributed as well to a volatile market for finished goods that could also limit demand growth next year. Low ethane/ethylene prices also contribute to lower PE prices but this downward trend is expected to change as US olefins exports increase in 2026, resulting in a more balanced supply/demand market. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2025. Argus Media group . All rights reserved.

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