The Brazilian domestic petrochemicals market is slowing down due to a dip in the economy and an adjustment in inventories, according to BMI’s latest Brazil Petrochemicals Report. The loss of competitiveness is intensifying as BMI had expected, with cheap imports flooding the market. The situation may get worse if international prices fall and there is a slackening in global demand. In the long-term the strong real coupled with the gains in competitiveness of US producers, due to the potential of shale gas resources, could undermine investment in the Brazilian petrochemicals industry.
In the 12 months to end-June 2011, production was down 0.9% y-o-y, while domestic sales grew 1.3% yo- y. Production was undermined by declining sales volumes coupled with falling competitiveness against imports and customer expectations of price reductions in the near future. In Q111, the production index declined 4.2% in response to a 3.3% fall in sales. Part of the fall in output was caused by the electricity blackouts that hit the country’s northeast in February. In Q211 production was up 4.0% q-o-q, although it was still 3.1% down y-o-y. Production growth lagged behind apparent consumption, which rose 8.0% yo- y in H111, although demand was slowing in Q211. Despite a slowdown in production and 33.9% y-o-y growth imports, average prices in H111 were up 14.1% y-o-y.
The real had gained significant strength against the dollar from September 2008, following a large influx of US dollars into the country. While this is clearly causing a problem for the Brazilian authorities, we are not convinced it is bad for the country's medium-term economic health. Brazil remains a relatively closed economy by regional and global standards, which has helped insulate Brazilian firms from external competition. Petrochemicals production is heavily oriented towards domestic consumption, which has exhibited strong growth and absorbed the increases in production capacity.
This means that a stronger currency could force an even greater efficiency drive among Brazilian firms, making them more competitive at a global level, although this will need to be accompanied by a substantial reduction in the amount of red tape facing domestic firms. Increasing specialisation in the chemicals industry, including bioplastics, as well as the move towards integration through merger and acquisition activity has partly offset the effects of appreciation on competitiveness. However, any significant increase in output will be directed primarily towards export markets, which Petrobras and Braskem do not believe will absorb the increase in output at healthy margins until 2017.
Brazil is third in BMI’s Americas Petrochemicals Business Environment Ratings with a composite score of 62.6 points, down 0.9 points from the previous quarter due to a decline in market risks. The Market Risk score fell 10.0 points to 60.0 points due to the effects of currency appreciation on the domestic industry’s competitiveness. While it has a relatively large petrochemicals industry, Brazil’s score is weighed down by a higher level of risk than most other countries in the region, with its long-term financial market risk a notable cause of concern. Brazil’s only chance to climb the ratings and overtake Canada is if the latter reduces its capacities, which is a distinct possibility as the Canadian petrochemicals industry struggles to compete in the global market and the US market remains in the doldrums. Brazil is 3.7 points ahead of Mexico and 14.2 points behind Canada.

[Studien Infos ausblenden]

Executive Summary 5
SWOT Analysis 7
Brazil Petrochemicals Industry SWOT 7
Brazil Political SWOT 7
Brazil Economic SWOT 8
Brazil Business Environment SWOT 9
Global Petrochemicals Overview 10
Petrochemicals Market Overview 10
Table: World Ethylene Production By Country, 2010 And 2015 (‘000 tonnes capacity) 10
Financial Results 15
Table: Financial Results Of Major Petrochemicals Companies, 2010 15
Global Oil Products Price Outlook 16
Table: Oil Product Price Assumptions, 2011 (US$/BBL) 17
Table: Oil Product Price Forecasts, 2011-2015 (US$/BBL) 19
Latin America Overview 20
Brazil Market Overview 23
Sector Performance 24
Regulation 24
Industry Trends and Developments 25
Bioplastics 27
Projects And Expansions 29
Foreign Ventures 30
Business Environment Ratings 32
Petrochemicals Business Environment 32
Brazil’s Legal Framework 34
Corruption 35
Industry Forecast Scenario 37
Petrochemicals Forecasts 37
Table: Brazil’s Petrochemicals Sector, 2008-2015 (‘000tpa, unless otherwise stated) 40
Macroeconomic Outlook 41
TABLE: Brazil - Economic Activity, 2008-2015 44
Company Profiles 45
Braskem 45
Dow Quimica 48
Politeno 49
Rio Polimeros 50
Ultrapar 51
Glossary of Terms 52
Table: Glossary Of Petrochemicals Terms 52
BMI Methodology 53
How We Generate Our Industry Forecasts 53
Chemicals and Petrochemicals Industry 53
Cross Checks 54
Business Environment Ratings 55
Table: Petrochemicals Business Environment Indicators And Rationale 56
Weighting 56
Table: Weighting Of Indicators 57
[Inhaltsverzeichnis ausblenden]