Brazil chemicals see volume growth in 2016

Despite a sluggish start to 2016, Brazil's chemical sector ended on a relative high after figures released on Monday by trade group Abiquim showed volume growth for the full year in production, domestic sales and demand.

Abiquim, which represents some 160 chemical producers in Brazil, said the sector benefitted from a more stable economic and political climate, especially in the second half of the year, a lower benchmark interest rate and slowing inflation.

"For chemicals, these factors are extremely relevant, since the sector supplies products to a wide range of other industries," said Fatima Giovanna Coviello Ferreira, Abiquim’s economics and statistics director.

According to the figures, production of industrial chemicals for the whole year rose by 4.0% compared with 2015, while domestic sales were up by 3.9%.

Domestic demand, which is measured by apparent consumption, or output plus imports minus exports, grew by 5.2%.

Capacity utilisation reached 80%, up by two percentage points compared with 2015.

Notwithstanding the positive results, Brazil's chemical sector has continued to struggle amid high energy prices, low levels of investment and a weakened economy still reeling from deep recession.

Chemical production last year was roughly in line with 2007 levels, while domestic sales were actually below those recorded a decade ago, Abiquim said.