FocusBrazil PP, PE sales may grow 3-5% in '09 - consultant

23 May 2009 00:52  [Source: ICIS news]

By Hellen Berger

SAO PAULO (ICIS news)--Sales of polyethylene (PE) and polypropylene (PP) by Brazilian producers could grow 3-5% this year, an analyst said on Friday, in contrast with much lower expectations by at least one industry player.

“I believe total sales of PE and PP should pick up this year, growing 3% to 5% compared with 2008 on new capacities put on stream by Braskem and Quattor,” said Otavio Carvalho, director of Porto Alegre-based market consulting company Maxiquim.

Plastics transformers will buy more this year because they have used up their stocks from last year, he said in Portuguese.

Producers will sell most of what they will produce, Carvalho said, adding he was already seeing signs of demand recovery in Brazil.

The economy seems to be recovery slowly, he said, but consumers will not change their behaviour and will continue buying food and other products that use resins as packaging.

Carvalho said technical stoppages in 2008 affected output, while new capacities are being added this year.  

However, producer profits may not grow since margins on exports were low, he said.

Petroquimica Triunfo commercial planning coordinator Eduardo Jose Dotti was not as optimistic.

Global demand for linear low density polyethylene (LLDPE), for example, was expected to increase gradually this year, but could stay about 15% lower than in 2008, Dotti said.

“Observing the scenario, the company has decided to focus on exports of ethylene vinyl acetate (EVA),” Dotti added in Portuguese.    

Carvalho said such an outlook was “exaggerated” and that there were already signs that local sales were already showing signs of recovery and would tend to get back to levels seen earlier in 2008.

“In the end of 2008, companies’ behaviour changed regarding investments and some were held as credit became harder to obtain…but that situation is also stabilising,” he said.          

In the international market, sales of plastics were also picking up, according to Carvalho.

In 2008, domestic sales of PE totalled about 2m tonnes, up 4.6% compared with 2007, while local sales of PP hit 1.3m tonnes, 4.9% higher than in the previous year, according to the industry group Abiquim. 

In April, Brazil imported 1.2m tonnes of chemicals, 5.7% more than in the previous month.

Compared with the same month of 2008, however, imports were down 30% in terms of volume and 26.7% lower in financial terms, according to Abiquim.  

For more on PE and PP visit ICIS chemical intelligence
To discuss issues facing the chemical industry go to ICIS connect

By: Hellen Berger
+1 713 525 2653

For the latest chemical news, data and analysis that directly impacts your business sign up for a free trial to ICIS news - the breaking online news service for the global chemical industry.

Get the facts and analysis behind the headlines from our market leading weekly magazine: sign up to a free trial to ICIS Chemical Business.

Printer Friendly