Insight Focus
Resin prices have surged 70% since the Middle East conflict began. The market is now grappling with growing supply shortage concerns alongside continued price pressures. Brazilian processors are responding by reducing packaging thickness and increasing recycled content to ease cost pressures. Anti-dumping measures are further tightening import dynamics.
Resin Prices Surge as Supply Risks Mount
The escalating prices of resins are no longer the only concern for the Brazilian plastics processing industry, although this remains strongly on the radar. In recent weeks, delays in the arrival of ships at the Port of Santos have also raised concerns about the risk of raw material shortages.
The warning signal was triggered after disruptions in the Strait of Hormuz and attacks on petrochemical plants in the Persian Gulf at the end of February. The region accounts for 15% of world polyethylene (PE) production and 40% of global exports of the material.
Asia is home to another important global hub for plastic resin production, with a strong dependence on oil imports from Gulf countries. With the escalation of the conflict, some plants have suspended or reduced production.
“Plastic processors in Brazil are already studying reducing the thickness and weight of packaging and using more recycled material to compensate for the scarcity of raw materials and high prices,” says Assunta Camilo, director of the Packaging Institute.
Assunta Camilo. Publicity photo.
The price increase has already reached 70% since the end of February for PE and PP (polypropylene), used in the manufacture of food and beverage packaging, as well as supermarket bags and adhesive labels, among other products. The price adjustment is not being passed on in full, which has impacted the sector’s financial results.
Anti-dumping Measures Reshape Import Flows
The tradition of trade defence in the Brazilian plastic resin market, with successive anti-dumping measures, does not help either. At the end of March, the government approved an anti-dumping measure, valid for five years, on PE from the US and Canada, taxed at USD 199.04/tonne and USD 238.49/tonne, respectively.
The measure had been implemented provisionally, with a validity of six months, in August of last year. Until then, the US led the supply of PE to Brazil. “In addition to competitive pricing, the flexible contractual conditions represented an attraction for the Brazilian market,” says Frederico Fernandes, a polymer specialist at Argus. Between 2015 and 2025, imports from the US increased by 757.5%, according to Comex.
Source: Comex
After the implementation of the anti-dumping measure, American imports began to fall. “At the same time, the volumes purchased from the Middle East, Asia, and Europe increased. These are regions that require longer delivery times to Brazil,” says Jonathan Lopez, Latin America correspondent at ICIS.
Source: Comex
The American petrochemical industry, which relies on domestic oil and natural gas production, was relatively less affected by the disruptions in the Middle East. In a scenario of logistical obstacles and production bottlenecks in the region, the Brazilian market would normally be looking even more to the US. The anti-dumping measure changed this equation.
For now, countries like Saudi Arabia, which have begun to compete for a larger share of the Brazilian market, have been able to maintain shipments. Egypt has also begun to occupy a growing space in exports to Brazil, with attractive prices and flexible payment terms.
In the first half of 2025, before the implementation of the anti-dumping measure, American resin arrived in Brazil at more competitive prices than similar products from Saudi Arabia, Egypt, and other countries.
Source: Comex
Now, the 12,900 Brazilian plastic processors are paying more for resin due to the war in the Middle East and changes in the dynamics of imports in Brazil. Contractual conditions have also become less flexible, impacting a large part of the Brazilian market.
About 95% of companies in the sector in Brazil are small and medium-sized, according to Abiplast (Brazilian Association of the Plastic Industry). In general, they operate with tighter cash flow than large companies and are more exposed to market fluctuations. There is also the spectre of high interest rates and greater credit restrictions for less capitalised businesses.
In April, the interest rate went from 14.75% to 14.5% per year, signalling a certain level of optimism from the Central Bank regarding key economic indicators such as inflation. However, the rise in the price of oil and basic inputs, caused by the conflict in the Middle East, may lead to a review of this policy.
Note: Average resale price, up to the second half of May.
Source: ANP, Petrobras.
Further Trade Measures Under Review
At the same time, the government is studying new anti-dumping measures. Imported PET from Malaysia and Vietnam is under scrutiny. There are also indications that anti-dumping measures on PP from South Africa and India, first imposed in 2014, will be extended.
As Brazil already has sufficient installed capacity to supply domestic PET demand, and the surcharges on PP from India and South Africa have been in effect for more than ten years, no major short-term changes are expected in the Brazilian market. Even so, the sector remains closely focused on resin deliveries at the Port of Santos and rising global prices.
As long as there is no resolution to the conflict in the Middle East, plastic processors are set to continue tightening their belts and looking for alternatives to circumvent price adjustments and raw material shortages.
