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Brazilian petrochemical companies urge for measures to revive sector

December 02, 2013
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<photocredit>Natalia Bratslavsky/iStockphoto/Thinkstock</photocredit>

The Brazilian petrochemical industry needs support from the government to stay afloat and to regain some of the ground it has lost over the past few years, according to BN Americas. Petrochemical companies in the country have become uncompetitive, mostly due to the increasing supply of cheap feedstock from the United States that has pushed prices down in North America.

The industry is calling on the government to provide businesses with an incentive package that will promote investment and is asking for a lower natural gas price, so that it can have an access to cheaper domestic feedstock. According to Pedro Freitas, director of strategic planning at petrochemical giant Braskem, since 2007 the price of U.S. petrochemical feedstock has fallen by $300 per ton, while in Brazil prices have gone up by $300 per ton, BN Americas reported.

Speaking at a seminar in the Brazilian congress, Freitas explained that as much as 80 percent of the feedstock used by Braskem was naphtha, which has become much more expensive than natural gas-based feedstock. But the company only uses natural gas as a source for 16 percent of its feedstock. If the Brazilian petrochemical industry is to aim for growth it needs access to cheaper raw materials, he stated.

His view was backed by Henri Slezynger, president of Brazilian chemical industry association Abiquim, who added that urgent measures were required to help the industry recover, the business news website said.

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