Braskem: Debunking the Myth of Middle East Feedstock Dependence
I feel like Sherlock after a hard day.
So, I stumbled upon these hooligans spreading lies about raw material supplies to Braskem.
So, a closer look at Braskem’s latest Form 20-F clearly shows that these concerns are largely misplaced.
Petrobras Remains the Core Supplier
Braskem’s operations in Brazil are still heavily anchored to Petrobras.
Petrobras has historically supplied up to 70% of the naphtha consumed by Braskem’s Brazil segment.
It is also the primary supplier of ethane, propane, propylene, and refinery streams.
Additionally, Petrobras accounts for roughly 40% of Braskem’s propylene supply under long-term contracts.
This makes Petrobras, not Middle Eastern exporters, the dominant and structurally embedded supplier within Braskem’s core operations.
Source: Braskem
Naphtha Exposure: Diversified and Global
Naphtha is indeed Braskem’s most important feedstock, accounting for 32% of total cost of goods sold in 2024.
But the key point is geographic diversification.
According to the company’s own disclosures, naphtha and condensate sourcing for the Brazil segment is distributed as follows:
Source: Braskem
No Structural Reliance on the Middle East
Braskem explicitly states that it:
Purchases naphtha under annual contracts with international suppliers
Supplements supply via spot purchases from regions including Africa, Europe, North America, and Latin America
There is no indication of reliance on suppliers from the Persian Gulf.
Importantly, Braskem’s African supply is not concentrated in geopolitically sensitive Middle Eastern-linked routes. Instead, it primarily comes from North African producers such as Algeria, Morocco, and Libya.
Takeaway
Braskem is not operationally dependent on naphtha supplies from the Middle East.
Its feedstock base is anchored by Petrobras
Its imports are diversified across multiple regions
Its exposure to Middle East tensions is primarily price-related, not supply-driven
As a result, current geopolitical risks involving Iran and Gulf countries are unlikely to disrupt Braskem’s production, though they may still influence input costs through global pricing dynamics.