The Brazilian government has approved a significant increase in import tariffs to protect its chemical industry, impacting key products in Braskem’s portfolio such as Polyethylene and PVC Resin. This move by Camex aims to level the playing field for domestic producers against unfair competition from Asian imports, particularly from China, as advocated by industry representatives and Abiquim.
Analysts see this as a positive development, especially for Braskem, which has been losing market share to imports. Santander Bank predicts benefits for Braskem in recovering lost market share and increasing domestic resin prices, potentially boosting the company’s financial performance with estimates of a $350 million annual increase in EBITDA.
XP Investimentos and UBS also share optimism, upgrading their recommendations for Braskem shares, foreseeing a 50% increase in share price and favorable positioning in the petrochemical cycle. Despite a slight share price dip on the announcement day, analysts believe this to be a temporary setback in an overall promising outlook for the company, with the tariff increase set for one year to benefit the Brazilian chemical and petrochemical industries.
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