APLA ’17: Brazil chlor-alkali market expected to grow with GDP

RIO DE JANEIRO, Brazil (ICIS)–Brazil’s chlor-alkali business is projected to grow in line with GDP in 2018, market sources said on Sunday.

Caustic soda activity is expected to rebound next year on an optimistic outlook placing GDP projected growth in Brazil at approximately 2.5%, the sources said on the sidelines of the annual meeting of the Latin American Petrochemical Association (APLA).

Brazil’s GDP contracted by 3.6% in 2016, and after one of the worst recessions in the country, GDP growth has moved to a slightly positive 0.7% for 2017, according to the International Monetary Fund (IMF). However, the IMF is projecting GDP growth for 2018 at only 1.5% in Brazil.

While a lower figure than expected by some at the APLA meeting, the IMF projection is still a significant improvement over 2016.

Caustic soda growth is expected to align closely to GDP because the product is consumed in a wide variety of applications, including alumina, pulp and paper, soaps and detergents, and other chemical industries.

With a more stable government outlook in recent months and with general elections scheduled for 2018, Brazil expects continuing steady growth, including in the chlor-alkali sector, the sources said.

The APLA annual meeting runs through Tuesday.