By Brazil Stock Guide – Braskem (NYSE: BAK; B3: BRKM5) reported a sharp increase in petrochemical spreads in the second quarter as the conflict in the Middle East disrupted feedstock supplies and pushed resin and chemical prices higher, although sales volumes weakened across key markets.
The report was Braskem’s first quarterly operational update under the company’s new shareholder and management structure, following IG4 Capital’s takeover of the controlling stake formerly held by Novonor. Braskem has described the transition as a new phase involving IG4 and a more active role for Petrobras in the company’s governance.
The Brazilian petrochemical producer said its average resin spread rose 82% from the previous quarter and 69% from a year earlier to US$ 653 per metric ton.
The spread on major chemicals nearly doubled from the first quarter to US$ 620 per ton, while Braskem’s polyethylene spread in Mexico climbed 73% sequentially and 98% year on year to US$ 1,425 per ton.
Brent crude averaged US$ 104 per barrel in the quarter, up 30% from the first three months of the year and 54% from the same period in 2025. Naphtha prices rose 27% quarter on quarter, but international resin and chemical prices increased more quickly, widening Braskem’s benchmark margins.
The company attributed the movement to lower feedstock availability, restrictions on petrochemical exports from the Middle East and the closure of the Strait of Hormuz. Supply constraints forced producers in several regions to reduce operating rates, limiting the availability of polyethylene, polypropylene and PVC.
Stronger pricing was offset by weaker volumes in Brazil. Braskem sold 763,000 metric tons of resins in the domestic market, down 2% from the first quarter and 8% from a year earlier.
Sales of major chemicals fell 4% sequentially and 5% year on year, while resin exports declined 23% from the second quarter of 2025. Braskem said higher imports weighed on domestic sales, with polyethylene volumes falling 9% and polypropylene sales declining 5% from a year earlier.
The average utilization rate at Braskem’s Brazilian crackers was 70%, up one percentage point from the previous quarter but four percentage points below the year-earlier period.
Operations in Mexico remained under pressure. The utilization rate at Braskem Idesa’s polyethylene plants fell to 43% from 55% in the first quarter as the subsidiary implemented measures to preserve liquidity.
Mexican polyethylene sales declined 11% sequentially and 20% from a year earlier. Average ethane imports through Braskem Idesa’s terminal fell to 14,700 barrels per day from 17,800 barrels, while supplies from state-owned Pemex dropped to 11,800 barrels per day from 14,800 barrels.
The lower operating rate means Braskem Idesa had less product available to sell despite the sharp improvement in benchmark margins.
The figures point to a potentially significant recovery in Braskem’s second-quarter operating earnings, driven mainly by a geopolitical pricing shock rather than an improvement in underlying demand or production.
The production and sales data are preliminary and have not been reviewed by Braskem’s independent auditor.
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