Feiplastic ’19: US PE exporters targeting Brazil market

SAO PAULO (ICIS)–US polyethylene (PE) exporters have been targeting the Brazilian market and have been moving to increase their market share in the country, several participants stated on the sidelines of this year’s Feiplastic.

The US is currently in the midst of a major capacity build-up for PE, with the country expected to add nearly 6m tonnes/year of additional PE capacity between 2017 and 2019.

As the US market is considered mature, it had always been expected that the bulk of this new material would be exported.

China was originally slated to be the main destination for much of this new capacity but ongoing trade tensions between the US and China have limited export opportunities to that country and have pushed producers to raise export volumes to other countries including Europe, southeast Asia and Latin America.

Latin America was traditionally the main export destination for surplus US PE cargoes and US producers typically have well-established import channels into Latin America.

“Competition in the Brazilian PE market is increasing as US sellers are aggressively seeking to raise their market share.  We are also seeing an increasing volume of imports from Argentina as economic difficulties in that country are pushing sellers to seek external markets for their products,” one participant commented.

“PE margins are seeing some compression and we anticipate prices to remain depressed for the remainder of the year with all the new imports arriving,” another participant stated.

PE is the most widely used plastic in the world, primarily found in packaging including plastic bags, plastic films and geomembranes.

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Feira Internacional do Plastico (Feiplastic) takes place on 22-26 April in Sao Paulo, Brazil.