By Brazil Stock Guide — Braskem (BRKM3, BRKM5), Brazil’s largest petrochemical producer, reported a 43% quarter-on-quarter decline in benchmark resin spreads in the third quarter of 2026, highlighting the pressure on petrochemical margins despite stronger domestic sales and improved production levels at its Mexican operations.
According to preliminary operating data released on Thursday (October 29), the benchmark resin spread in Brazil fell to $372 per metric ton from $653 in the second quarter. The contraction reflected a 23% decline in international reference resin prices, which outpaced the 6% reduction in naphtha costs.
Braskem attributed the broader deterioration in petrochemical spreads to moderating global demand and easing geopolitical risk premiums associated with the conflict in the Middle East.
The deterioration contrasted with stronger commercial performance in Brazil. Domestic resin sales reached 854,000 metric tons, increasing 12% from the previous quarter and 9% from a year earlier. Braskem attributed the improvement to its strategy of expanding market share in priority segments. Resin exports climbed 37% quarter-on-quarter to 240,000 tons, supported by greater product availability. The average utilization rate at Brazilian ethylene crackers remained broadly stable at 69%, compared with 70% in the preceding quarter.
Sales of major chemicals, however, declined 18% year-on-year to 574,000 tons, reflecting lower volumes of gasoline, benzene and paraxylene. The company cited its decision to prioritize higher-value gasoline sales, the permanent shutdown of a customer’s facility and reduced product availability. Exports of major chemicals increased 56% year-on-year, partly reflecting weaker domestic demand.
The international picture was equally challenging.
In the United States and Europe, polypropylene plant utilization declined to 74%, from 76% in the second quarter, while sales fell 2% to 489,000 tons. The most striking deterioration occurred in Europe, where the benchmark polypropylene spread collapsed 88% to just $18 per ton, down from $145 in the preceding quarter and $155 a year earlier. Braskem cited weak demand from the construction, automotive and packaging industries, alongside logistical disruptions that restricted propylene availability.
Mexico provided a more encouraging operational development. Braskem Idesa increased its polyethylene plant utilization rate to 62%, up sharply from 43% in the previous quarter and 47% a year earlier. Polyethylene sales rose 28% quarter-on-quarter to 159,000 tons, supported by increased ethane imports and higher feedstock deliveries from state-owned oil company Pemex. The improvement came as Braskem Idesa advanced its financial restructuring through an agreement with its principal stakeholders.
Nevertheless, stronger Mexican production did not translate into more favorable market conditions. The benchmark polyethylene spread in Mexico fell 35% quarter-on-quarter to $921 per ton, from $1,425, as polyethylene prices declined while ethane costs increased. The spread remained 27% above its level in the third quarter of 2025.
Braskem’s renewable plastics business also showed weakness. Sales of its bio-based polyethylene, marketed under the I’m green brand, declined 29% year-on-year to 31,000 tons. The utilization rate at its green ethylene facility dropped to 47%, from 66% in the previous quarter, partly because of a scheduled 33-day maintenance shutdown completed in October. The company also pointed to weaker demand and inventory adjustments across the plastics supply chain.
The quarterly figures illustrate the uneven conditions confronting Braskem. Higher sales volumes in Brazil and recovering production in Mexico have strengthened the company’s operational position, but sharply narrower benchmark spreads could constrain the financial benefits of those improvements. Although spreads declined substantially from the second quarter, they remained above year-earlier levels in several markets, underscoring the volatility of an industry exposed to global oversupply, energy prices and geopolitical developments.
Braskem said the operating figures are preliminary and have not been reviewed by its independent auditor. The report does not provide revenue, earnings or cash-flow figures, leaving the financial impact of the quarter’s margin compression to be assessed when the company publishes its financial results.
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