Braskem should feel a more immediate positive effect on its operations in the United States if Donald Trump’s elected government adopts new protectionist measures in the automotive sector, given the importance of the sector in the customer portfolio of the largest petrochemical company in Latin America.
“There is a sector that can have a more immediate effect, which is automotive,” said Braskem’s financial director, Pedro de Freitas, in an interview with journalists after the release of the company’s third quarter results.
“If protectionism increases in the automotive sector it could have a faster effect (for Braskem) because in the polypropylene operation we have an important sale to the automobile industry. This could have a more immediate effect”, added the executive, citing that in other sectors the effects will depend on “reconfiguration of production chains”.
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Braskem typically earns between 15% and 20% of its earnings before interest, taxes, depreciation and amortization (EBITDA) in the United States, the executive said.
And just as the CEO of Gerdau defended the day before, Freitas stated that a possible increase in North American protectionism under Trump accelerates the urgency for the Brazilian government to accelerate trade defense measures.
“If it closes more there (USA), whoever was selling there will sell in other places and this will come to Brazil”, said Freitas, referring not only to petrochemical products, but to the entire transformation industry.
SPREADS
Although Braskem recorded an improvement in petrochemical spreads last quarter, the company expects a decline in the fourth quarter for the indicator and still expects a slow evolution throughout 2025, said Freitas.
The spread is the difference between the cost of the raw material and the selling price of the petrochemical product.
“The last quarter is always weaker. The expectation is for a reduction in spreads mainly in Brazil and Mexico and less in Europe and the USA”, said Freitas, citing that for the first quarter the expectation is for an improvement in Brazil and Mexico and relative stability in the other two regions.
“We still see a slow recovery in spreads in the market. We do not expect a change in the level of the spread to a cycle average next year”, stated the executive.
At around 11:46 am, Braskem shares rose almost 4%, after the publication of the third quarter balance sheet showed the company’s operational improvement in Brazil and the USA and a strong reduction in leverage.
