Brazilian chemical industry closes 2024 with a US$ 50 billion deficit

Why did a sector as strategic as the Brazilian chemical industry close 2024 with a deficit of approximately $50 billion? This is the question raised and answered by Abiquim (Brazilian Chemical Industry Association) in this special report, shared exclusively with AgroPages.

According to Abiquim, the path "is still long to overcome the challenges the national chemical industry has been facing, intensified especially over the past year due to predatory imports from the United States and Asian origins, which resulted in a concerning increase in idle capacity."

Brazil imported $63.9 billion worth of chemical products in 2024, a figure that surpassed the last ten years of sectoral trade balance monitoring by Abiquim, except for the record $80.3 billion registered in 2022. "It is crucial to highlight, however, that the physical quantities imported increased by 11.5% compared to 2023, totaling 65.3 million tons," says the association.

Of this total, 41.1 million tons were exclusively equivalent to fertilizer intermediates—a group that saw a 7.4% volume increase compared to 2023. "These products could be manufactured in Brazil if policies were implemented to stimulate greater supply of competitively priced gas, among other measures. This is the largest volume imported in the entire historical series that began in 1989, in the context of predatory imports originating from the United States and, especially, Asian countries, whose competitiveness is sustained by Russian raw materials acquired at discounted prices due to the war in Eastern Europe. This has led to a 6.3% drop in the average import price of chemical products."

Domestic Manufacturing Under Threat

In 2024, increases in import volumes were recorded across all monitored segments, particularly in important groups of industrial chemical products with significant domestic production: resins and elastomers (32.4%); organic chemicals (14.3%); inorganic chemicals (9.1%); and other miscellaneous industrial chemicals (9.3%). These imports were made at predatory prices—on average 6.3% lower than the same period last year—and throughout the year caused a severe imbalance in the domestic market, even leading to the shutdown of national production of strategic products for various value chains.

In terms of the main geographic suppliers of chemical products to Brazil, imports from Asia (excluding the Middle East) represented 31% of the total, solidifying the region's position as the primary supplier ($19.6 billion in imports). This region also accounts for the largest sectoral trade imbalance, with a deficit of $18.0 billion.

Exports and Deficit

Brazilian chemical exports, on the other hand, reached $15.2 billion in 2024, a 4.3% increase compared to the previous year, but with stability in the physical quantities exported (a 0.2% decline). This occurred in the context of the growing displacement of Brazilian products in key markets due to the artificial competitiveness of Asian products.

Within this context, the Brazilian chemical sector is the third-largest exporter in the entire manufacturing industry—behind the food products segment, which leads with $66.5 billion, and the basic metals segment, which ranks second with $23.2 billion.

The trade deficit in chemical products totaled $48.7 billion in 2024—a financial amount that only did not reach or surpass the record $63 billion deficit of 2022 due to the predatory prices of imports, which mitigated the real imbalance in the trade balance.

Scenario

When evaluating trade exchanges with the main regional economic blocs in 2024, Brazil only achieved a surplus with its neighbors and historical trading partners in Mercosur and ALADI, with trade surpluses of $1.4 billion and $180 million, respectively. However, significant negative results were recorded again with the European Union and NAFTA (North America), which together exceeded an aggregate deficit of $20.7 billion, in addition to the aforementioned growing imbalance with Asia (the deficit with this region increased from $10 billion in 2020 to $16.2 billion in 2023 and $18.0 billion in 2024).

According to Abiquim's Executive President, André Passos Cordeiro, 2024, although highly challenging, was also a year marked by significant achievements, such as the approval of emergency tariff increases for 30 chemical products, which provided relief to the sector.

Starting in October, with the measure's implementation, the chemical sector began to see its effects materialize, with a significant 6.35% increase in domestic physical production in the last two months of the year. "We know this is just a first step, but it is crucial to face the extremely adverse international scenario, with excess global production capacity for chemical products and heavy subsidy programs in the world's leading chemical producers," he says.

Passos also highlights that the Brazilian government's participation at different levels, with engagement and activities in coordination, promotion, and support, will be essential to enable the transition from fossil-based chemistry to carbon-based chemistry, balancing these two dimensions.

"We are crossing the threshold into the low-carbon economy, and the chemical industry is ready to lead this transition. Low-carbon chemistry is related to the use of technologies that reduce or neutralize greenhouse gas emissions. Renewable chemistry, carbon capture and storage, and chemical recycling are some examples of the leadership that the Brazilian chemical industry can exercise," concludes the Executive President.

About Abiquim

With 61 years of history, the Brazilian Chemical Industry Association is a non-profit organization that brings together large, medium, and small chemical industries, as well as service providers to the chemical sector in logistics, transportation, waste management, and emergency response. The association conducts statistical monitoring of the sector, promotes specific studies on the activities and products of the chemical industry, actively follows and contributes to legislative changes to enhance the sector's competitiveness and development, and advises member companies on economic, technical, and foreign trade matters.

"Over these six decades representing the chemical sector, Abiquim continues to be an active voice, engaging with its stakeholders and seeking solutions so that the Brazilian chemical industry can continue to do what it does best: being the industry of industries," says the association.

About the Chemical Industry

As a provider of raw materials and solutions for various economic sectors—agriculture, transportation, automotive, construction, health, hygiene, and even aerospace—the chemical industry in Brazil is the most sustainable in the world, according to Abiquim. For every ton of chemicals produced, it emits 5% to 51% less CO2 compared to international competitors, in addition to having an energy matrix composed of 82.9% renewable sources—compared to the global average of 28.6%.

"This achievement was only possible thanks to a series of research efforts, innovations, and improvements introduced by the chemical industry over the years, gradually, such as the electrification of equipment and on-site renewable energy production, as well as the shift from fossil fuels to alternative inputs like ethanol," concludes the association, led by André Passos Cordeiro.

(Editing by Leonardo Gottems, reporter for AgroPages)