Braskem Slashes Costs with U.S. Ethane Imports

Braskem, a leading Brazilian petrochemical company, announced a strategic shift to import U.S. ethane for its plants, aiming to cut feedstock costs.

This move addresses margin pressures in a tough global market. The plan leverages cheaper ethane to boost competitiveness during an industry downturn.

Global polyethylene and polypropylene oversupply has squeezed producers’ margins since 2023. U.S. shale gas and Chinese exports flooded markets, driving prices down.

Brazil’s reliance on costly naphtha, sourced from local refineries, puts Braskem at a disadvantage compared to ethane-based competitors. Ethane costs thirty to fifty percent less than naphtha, offering a clear cost advantage.

Limited domestic ethane supply pushed Braskem to secure U.S. imports. The company began blending ethane at its Camaçari and Triunfo complexes in early 2025, targeting a cost edge.

Currently, imported ethane accounts for ten percent of Braskem’s feedstock mix. The company plans to raise this to twenty to thirty percent by mid-2026. This gradual shift balances cost savings with supply chain stability, minimizing disruption risks.

Braskem and Petrobras Expand Ethylene Production

Braskem and Petrobras greenlit a R$233 million ($39 million) expansion in April 2025. The project will increase ethylene output by 220 thousand tons annually at the Duque de Caxias plant.

A long-term U.S. ethane supply deal supports this upgrade, ensuring feedstock reliability. Additionally, Braskem pushed for higher tariffs on plastic resin imports, raising them from 12.6 to twenty percent in 2024.

These tariffs counter cheap U.S. and Chinese imports, protecting local margins. Analysts predict modest margin recovery for Brazilian producers in 2025. Braskem Idesa’s Veracruz terminal in Mexico showcases the strategy’s success.

It handles eighty thousand barrels of U.S. ethane daily, feeding over one million tons of polyethylene production yearly. Dedicated vessels and pipelines ensure steady supply, unlike erratic Pemex deliveries.

Braskem and Advario invested $446 million in the Veracruz terminal to replace unreliable local feedstock. On-site infrastructure cuts transport costs and boosts efficiency.

This model informs Brazil’s ethane import strategy, emphasizing logistics and reliability. The shift is expected to reduce variable costs per ton of polyethylene and polypropylene by five to ten percent.

Braskem aims to strengthen margins through feedstock diversification and tariff protections. However, ethane price swings and Caribbean shipping challenges could temper savings.

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