Brazil May Impose ADDs on US, Canada PE; Indian Importers Eye Market Ripple

Key Highlights:

1. Braskem announced a PE price hike for June amid ADD anticipation. 
2. Domestic PE demand spiked as buyers rushed to purchase before duties. 
3. Brazil imports 50% of its PE, mostly from the US and Canada. 
4. ADDs may take effect by 2 June; final decision due 29 May.

Brazil’s PE Prices Rise Ahead of Antidumping Duties

• As per the ICIS report, with the imminent possibility of antidumping duties (ADDs) being levied on US and Canadian-origin PE, Brazilian distributors have begun increasing local prices in anticipation. 
• Braskem, the country’s leading producer, has announced a price adjustment for June, and market sources report upward pricing trends as buyers rush to secure cargoes before duties come into effect.
• Distributors like Vinmar have explicitly stated that any additional costs arising from ADDs will be passed on to customers, indicating a firm pricing stance in the upcoming weeks.

Import Dependency and Low Domestic Production Impact Supply

• Demand: Local PE demand in Brazil has seen a sharp uptick, driven by customers accelerating their purchases amid fear of rising costs post-ADD implementation. Sellers are actively encouraging early buying to preempt potential price hikes, leading to a temporary demand spike across all PE grades.
• Supply: Despite the increased demand, domestic supply remains constrained due to historically low production utilization rates – reportedly hovering around 60–65% for most Brazilian producers. This weak capacity utilization stems from global oversupply and cost competition from North American producers, especially the US and Canada.
• Imports: Roughly 50% of Brazil’s PE consumption is met via imports, with a significant share coming from the US and Canada. Should ADDs be imposed, these supply chains would be disrupted, pushing importers to seek alternative sources or rely more heavily on limited domestic output.

Market News: Gecex Decision on US-Canada PE Dumping Due 29 May

• Brazil’s Foreign Trade Chamber (Gecex) is set to conclude its investigation into PE dumping from the US and Canada on 29 May. The investigation began in November 2023 following a formal complaint from Braskem.
• The potential ADDs are seen as part of a broader protectionist policy shift under President Luiz Inacio Lula da Silva’s administration. Over the past two years, the government has imposed several trade barriers to shield domestic chemical manufacturers, citing unfair competition and declining industrial performance.
• Distributors such as Vinmar have issued formal advisories, indicating that ADDs could become effective as early as 2 June. They have also clarified that any financial burdens from these measures would be borne by customers, not suppliers.
• Gecex is also reviewing ADD proposals on other polymers like PVC and PET, further highlighting the Brazilian government's broader focus on chemical sector protectionism.

Market Anticipates Price Hikes and Ongoing Supply Tightness

The market widely expects the approval of provisional ADDs on US and Canadian PE, effective in early June. This is likely to support further price hikes and sustain strong near-term demand, while supply tightness may persist due to reliance on imports. Longer-term impacts will depend on whether these duties are made permanent following the 18-month investigation period.