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    Till Lois • Schroders

    Till Lois's questions to Braskem SA (BAK) leadership

    Till Lois's questions to Braskem SA (BAK) leadership • Q2 2024

    Question

    Till Lois asked about the factors driving the significant drop in U.S. ethane prices and inquired about Braskem's price assumptions for the third and fourth quarters of the year.

    Answer

    Pedro van Langendonck Teixeira de Freitas, an executive, attributed the low ethane prices to high U.S. natural gas production combined with logistical bottlenecks for exports, such as low water levels in the Panama Canal, leading to a supply glut in the Gulf of Mexico. He stated that for the second half of the year, Braskem assumes an average ethane price of $130 per ton, which is higher than current lows but remains very competitive against naphtha.

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    Till Lois's questions to Braskem SA (BAK) leadership • Q2 2024

    Question

    Till Lois of Schroders pointed to the sharp drop in U.S. ethane prices and asked about the deflationary factors beyond Middle East events and what Braskem assumes for ethane prices in the third and fourth quarters.

    Answer

    Executive Pedro van Langendonck Teixeira de Freitas attributed the low U.S. ethane prices to high natural gas production and logistical bottlenecks. He cited new export terminals still under construction and low water levels in the Panama Canal, which limit exports to Asia and cause ethane to accumulate in the Gulf of Mexico. For the second half of the year, he said the company assumes an average price of $130 per ton, which is about 50% higher than current levels but remains highly competitive against naphtha.

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