Braskem Reports Strong Domestic Sales Amid Weaker Exports in Q3 2024

Braskem (BRKM5) recently released its production and sales report for the third quarter of 2024. The company experienced a notable increase in domestic sales, while exports faced significant declines.

The report highlighted a 14% rise in sales compared to the previous quarter and a remarkable 31% increase year-over-year.

This growth primarily stemmed from improved product availability following the resumption of operations in Rio Grande do Sul. The return to full capacity allowed Braskem to enhance the supply of essential chemicals like ethylene, benzene, and gasoline.

In addition to higher sales volumes, the utilization rate of Braskem‘s petrochemical plants increased by 2% from the previous quarter and 5% compared to the same period last year.

”This improvement resulted from adjustments made to align production with global demand and the normalization of operations after previous shutdowns.

Despite these positive developments, Braskem faced challenges in its export markets. The company reported a 47% decline in exports year-over-year and a 34% drop compared to the previous quarter.

This downturn was largely due to reduced sales of gasoline and benzene, which were prioritized for domestic consumption. Additionally, the lower availability of toluene for export contributed to this decline.

Braskem’s Market Dynamics

Global supply chain issues further complicated matters. Rising maritime freight costs, driven by conflicts in the Red Sea, impacted international trade flows and pricing for petrochemical products.

Moreover, increased planned and unplanned production stoppages limited supply availability. Regulatory changes also played a role in shaping Braskem’s market landscape.

In September, Brazil’s Chamber of Foreign Trade approved an increase in import tariffs on several chemical products from 12.6% to 20%.

Analysts view this adjustment as beneficial for Braskem, as it may enhance EBITDA by reducing cash burn and limiting competition from international manufacturers.

The tariff hike aims to stabilize domestic prices for crucial products like polyethylene and PVC. By raising import costs, this measure seeks to support local manufacturing and bolster Braskem’s competitive position.

As of October 24, Braskem’s stock price showed slight resilience, rising by 0.28%. The company is set to release its full financial results for Q3 2024 on November 6.

In summary, Braskem’s recent report reveals a company navigating contrasting market conditions. Strong domestic demand stands against declining exports.

The strategic adjustments following operational resumption have significantly boosted local sales. However, external pressures like rising freight costs and regulatory changes present ongoing challenges that will influence Braskem’s future performance.

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