Insight Focus
Resin prices surge amid Persian Gulf tensions. Since the conflict began, polyethylene and polypropylene prices have risen by 70% in Brazil, as the US–Iran impasse and risks of new attacks in the Strait of Hormuz disrupt markets. At the same time, shifting price outlooks and weak domestic competitiveness are driving greater reliance on imported resins.
Given the diplomatic impasse between the US and Iran, and threats of new attacks on ships in the Strait of Hormuz, the plastic resins market is no longer willing to predict when prices will return to normal.
“A few weeks ago, the expectation was that polyethylene (PE) and polypropylene (PP) prices would peak in May and then begin to decline. But that view was contingent on events in the Gulf, and for now there is no sign of a resolution to the situation in the Strait of Hormuz,” says Jonathan Lopez, Latin America correspondent at the consulting firm ICIS.
The Brazilian market has been following the global shock and is already registering a sharp escalation in costs. Since the beginning of the conflict in the Middle East, the prices of PE and PP have jumped by about 70% in Brazil.
This movement is driven by a critical combination, based on a significant supply constraint—the Middle East accounts for 40% of global resin exports. The increase in oil and natural gas prices, essential inputs for the petrochemical chain, is another important pillar of this equation.
In the PET segment, where China, Vietnam, and Malaysia are major production hubs, price increases reached 30%, according to ICIS. Despite external pressure, Brazil maintains a strategic defensive position. Imports represent less than 10% of total PET consumption, and the national industry has the installed capacity to meet demand.
Import Dependence Limits Market Power
The PE and PP sectors experience a different reality, with the local production structure centralised in a single company, Braskem. This scenario restricts the bargaining power of processing industries, limiting negotiations on price and payment terms. As a result, global suppliers end up gaining ground by offering more flexible commercial conditions.
Last year, 55% of the PE used in Brazil originated abroad, according to ICIS. Between 2015 and 2025, imports increased by 360%, according to Comex.
Source: Comex
The increase in external purchases of PP was also significant, rising from 183,000 tonnes in 2015 to 524,000 tonnes in 2025.
Source: Comex
Domestic Supply Constraints Persist
It is also worth noting that the production capacity of plastic resins in Brazil does not fully meet domestic demand. Braskem remains the sole domestic producer of polyethylene (PE) and polypropylene (PP), making it a critical player in the local market.
Recent operational and governance developments have aimed to position the company more effectively for the future. Progress in negotiations regarding the sale of a 50.1% stake in Braskem, alongside expectations of administrative adjustments and a more active role from Petrobras—currently holding 36.1% of the company’s capital—have brought a degree of optimism to the sector.
Production of polypropylene yarns
“The agreement signals a move towards greater financial pragmatism, which could restore confidence in the Brazilian petrochemical chain,” says Frederico Fernandes, a polymer specialist at Argus.
In the short and medium term, however, no significant changes in production capacity are expected. Imports are likely to continue playing a prominent role in the Brazilian market. As long as hostilities in the Middle East persist, price volatility should remain on the radar.
