Blasco: The international petrochemical market is still full of challenges in 2023

A few days ago, the Brazilian petrochemical giant Brasco held a press conference and announced its losses in the fourth quarter of 2022. The relevant person in charge of the company pointed out that the global petrochemical market is expected to remain sluggish in 2023, and the industry is looking forward to China's economic recovery to inject development momentum into the international market.

At the meeting, the spokesperson of Brasco said that the spread of its products, especially polyethylene (PE) and polypropylene (PP) products, remained low, resulting in a net loss of US$326 million for the company in the fourth quarter of 2022. The company's chief financial officer, Pedro Freitas, believes that for petrochemical companies, global market operations in 2023 are still "challenging", and the situation will gradually improve after the end of 2023 or 2024. The speed of market recovery will depend on the Chinese economy. In 2022, petrochemical product input costs will rise and prices will fall, resulting in petrochemical product spreads hovering at a low level. China is the key to pushing out of this dilemma.

Pedro Freitas believes that spreads between key polymers PE and PP should start to recover in 2023. However, 2023 remains challenging for Brasco. Pedro Freitas said: "We think the situation in 2023 is very challenging. But we also see that in 2024 and 2025, there is not enough capacity to enter the market, and the overall capacity is difficult to meet the growth in demand, so we are very optimistic about the two years. The market conditions are expected to be optimistic. If China’s economy recovers faster than expected, we will make a more positive forecast.” He admitted that Brasco will put a number of large-scale petrochemical projects into production in 2023 and in the next few years. But he also said that delaying the start-up of these petrochemical projects could also give the company an opportunity to improve its performance.

Brasco CEO Roberto Bischoff said the situation for petrochemicals remained "volatile". While the industry waits for China's economic recovery to support market demand, Blasco will focus on cost control and capturing new markets. "The speed of China's economic recovery will be one of the main factors that will prompt the recovery of international market spreads and re-enter the upward cycle. Under the current situation, our first action is to maximize the scale of operations, seize sales opportunities, and maintain The principle of cost control,” says Roberto Bischoff.