By Brazil Stock Guide – Braskem S.A. (B3: BRKM3, NYSE: BAK) announced today that the Committee-Executive of Management (Gecex) of Brazil’s Foreign Trade Chamber (Camex) approved the extension of a 20% import duty on polyethylene (PE), polypropylene (PP), and polyvinyl chloride (PVC) resins until October 16, 2026. The decision continues from a market update issued on September 19, 2024, where the company had indicated that it was awaiting Camex’s final ruling.
The tariff increase, aimed at protecting the domestic market from external trade imbalances, will give Braskem temporary relief amid its ongoing financial struggles, including a high debt load, cash burn, and increasing concerns over its solvency.
By maintaining the higher tariff, Braskem aims to remain competitive against foreign competitors whose products might otherwise flood the Brazilian market at lower prices. The petrochemical industry had warned that any reduction in tariffs could exacerbate the sector’s financial difficulties, leading to potential job losses and production cuts.
However, analysts note that while this decision provides temporary relief, Braskem’s long-term challenges, including debt management and investor confidence, remain unresolved.
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