Brazil production, sales of chemicals fall in June

26 July 2012 23:07  [Source: ICIS news]

MEDELLIN, Colombia (ICIS)--Brazil’s production and domestic sales of chemical products in June fell from the previous month by 3.48% and 5.04% respectively, industry association Abiquim said on Thursday.

In addition, production in the second quarter of 2012 fell by 6.11% from the first quarter while domestic sales dropped 6.56% over the same period, the organisation said.

Usually, the second quarter in any given year is stronger than the first quarter, Abiquim noted.

Chemical production in June 2012 was 1.66% lower than in June 2011. However domestic sales for the same period rose by 3.12%, Abiquim said.

Capacity utilisation in the industry dropped by 4 points year-on-year to 74%, and was also 4 points lower than in May.

Prices in June were 0.97% higher than in May and up 9.97% year-on-year.

According to the industry association, the monthly and quarterly slump is due to weak domestic demand triggered by lower prices in the international market.

“Some clients are waiting for the drop in international prices to be reflected in Brazil,” Abiquim said.

Moreover, government measures to stimulate the chemicals industry have failed, said Abiquim.

According to Abiquim, more structural measures are required, including reductions in electricity tariffs for the chemical industry and lower natural gas prices.

“Brazil is in a race against time to meet the demand that the country will experience during the forthcoming sporting events (2014 World Cup and 2016 Olympics),” Abiquim said.

By: Simon West

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