Production Slowdown and Record Idle Capacity Hit Brazilian Chemical Industry
The Brazilian Chemical Industry Association (Abiquim) has reported a sharp decline across all major performance indicators in the first two months of 2025. Production fell 5.6%, domestic sales dropped 0.8%, and national demand declined 4.0% year-over-year. Capacity utilization plunged to 60%—the lowest level since 1990—highlighting widespread underuse and growing inefficiencies in Brazil’s industrial chemical base.
Segments with the highest idleness include plasticizers (61%), plastic intermediates (48%), and fertilizer intermediates (44%).
Trade, Pricing, and Export Dynamics
Brazil’s chemical export volume plummeted 15.8%, exacerbating the competitiveness gap with global producers. Imports rose sharply in several categories including thermoplastic resins (+28.3%), inorganic chemicals (+26.7%), and synthetic fiber intermediates (+23.9%). The real appreciated against the dollar and euro, making imports relatively cheaper and hurting domestic suppliers.
Despite this, the Abiquim-Fipe Price Index showed a 5.1% price increase in early 2025, translating to real price gains of 11.3% (USD) and 11.2% (EUR). Brazil’s chemical sector closed 2024 with US$158.6 billion in revenue, contributing 11% to industrial GDP and employing over 2 million people.
Policy, Deglobalization, and Path to Sustainability
Executive President André Passos Cordeiro stressed the urgent need for government-led initiatives. Brazil’s chemical sector faces structural weaknesses as global giants like the US, EU, and China subsidize local production. Deglobalization and trade wars (e.g., US–China) have reshaped global supply chains.
Key recent advances include:
- Emergency tariff increases for 30 chemical products boosting late-2024 production by 6.35%
- Approval of the National Chemical Substances Inventory Bill, covering 15,000+ substances, aligning Brazil with global chemical safety standards
- Creation of a sustainable feedstocks working group to plot decarbonization paths and promote bio-based chemistry
Brazil remains a mid-tier producer of basic chemicals but is increasingly positioned to lead in biochemical innovation due to its renewable energy matrix and biomass availability. Still, competitiveness is hindered by high natural gas and naphtha prices, and unfavorable energy costs.
Brazil Specialty Chemicals Market Outlook
According to the latest market data, Brazil’s specialty chemicals market generated USD 26.6 billion in 2024 and is forecast to reach USD 34.2 billion by 2030, growing at a CAGR of 4.3% between 2025 and 2030.
- Largest segment: CASE (Coatings, Adhesives, Sealants, and Elastomers), with 38.17% share in 2024
- Fastest growing segment: Institutional & Industrial Cleaners
- Brazil accounted for 2.7% of global specialty chemicals revenue in 2024
- Major global players: Solvay, Evonik, Clariant, Akzo Nobel, DuPont, Lanxess, Huntsman, Lubrizol
In Latin America, Brazil leads the specialty chemicals market in revenue, while Argentina is projected to be the fastest-growing market through 2030.
Demand Drivers: Food, Beverage, and Oil & Gas Industries
Brazil’s food and beverage industry, comprising over 35,800 companies and contributing 10% of GDP, is a major consumer of specialty chemicals such as food additives, flavors, fragrances, and packaging chemicals.
Growing investment in Brazil’s oil & gas sector, led by Petrobras, is also boosting demand for oilfield chemicals and specialty inputs. Government support for these industries is expected to further fuel specialty chemical growth in the coming years.
