MOSCOW (MRC) -- Brazilian production of plastics will increase 1.8% in volume in 2014, after rising 1.6% in 2013, said Bnamericas , citing plastics industry association Abiplast.
According to a report from Agencia Estado, Abiplast expects total plastics demand in Brazil to rise by 9% in value in 2014, a similar increase to that of 2013.
However, whereas in 2013 much of the rise in demand has been supplied by imported products, in 2014 local producers should benefit more.
Abiplast president Jose Ricardo Roriz Coelho said that the recent depreciation of the Brazilian real will lead to a slowdown in the imports of food products, which are already packaged.
Packaging for food is the largest source of demand for the Brazilian plastics industry. Roriz said demand from the sector will drive the performance of plastics converters in the country in 2014.
Roriz said that the plastics sector in Brazil continues to be squeezed by rising prices of thermoplastic resins. According to Abiplast, the rise of the dollar and of international resin prices increased costs by 18% in the first nine months of the year, while the prices of plastic products sold by the companies only increased by 4.55% in the same period.
"The margin of the plastic converter industry is being transferred to the resins industry," Roriz said.
As MRC wrote before, Brazilian trade deficit in chemicals in the first nine months of 2013 was 19.7% greater than in the same period in 2012. The total deficit of USD23.8bn for the year to September reflected a 10.8% increase in chemical imports to USD34.4bn, and a 4.9% drop in Brazil's chemical exports to USD10.6bn. Abiquim expects Brazil to post a record annual trade deficit in chemicals in 2013 of more than USD33bn.
MRC