Braskem’s shares rose on Wednesday, after a report named it as one of the key beneficiaries of an incentive program proposed by the government to target the chemical industry in the United States.
According to the local newspaper InfoMoney, Braskem stock rose 7.53%, or R$10 at 10:25 am Brasilia Time, after briefly rising more than 8 percent earlier in session.
This surge was a result of the approval by the Chamber of Deputies of Bill 892/2025 which seeks the establishment of the Special Program for the Sustainability of the chemical industry.
Braskem is a major petrochemical company in Latin America, and also the biggest producer of thermoplastics resins in America.
Sector to benefit from legislative boost
The Brazilian Petrochemical Industry is encouraged to improve their competitiveness by implementing tax credits.
It is anticipated that the acceptance of an urgency regime will speed up the process for a legislative measure at the Congress.
Investors and experts are confident in the early progress of the plan, even though it is subject to further revisions. It must also be approved by both the House of Representatives as well as the Senate.
Significant earnings impact projected
Experts at XP believe that Braskem could see a major increase in earnings if the PRESIQ program passes.
Braskem is expected to benefit from the proposed measure by a maximum of US$500,000,000 per year, which represents a roughly 40% improvement over current projections for 2025.
The annual benefit from 2027-2029 is estimated to be approximately US$450 millions.
Bradesco BBI, in line with the same view, also highlighted how Braskem will benefit from these incentives by improving its credit rating and reducing pressures placed on it.
Investor Reaction
Braskem is confident in its ability to capitalize on the anticipated passage of this bill.
The Bill 892/2025 may not become law but the event represents a major shift in the sentiment of the company. It has faced challenges recently, including low demand and expensive raw materials.
This increase in share prices also shows the market’s sensitivity to changes made by policy within Brazil’s industrial sector.
The petrochemical sector, which is heavily dependent on subsidies from the government due to its high costs of operation and competition around the world, will benefit enormously from initiatives like PRESIQ.
Be cautious when optimistic
Analysts and other stakeholders are still apprehensive despite the strong market response.
Brazil’s legislative process can be unpredictable, with the possibility of a law being rejected or undergoing changes.
The urgency class indicates to the legislators that they are prioritising this issue, which could speed up the deliberations.
Investors are hoping for a successful outcome, and Braskem is positioning itself to be one of the biggest winners in the event that the law becomes law.
The combination of short-term market gains and potential long-term profits highlights the strategic importance of the PRESIQ Initiative, not just for Braskem, but for the Brazilian chemicals sector in general.
The proposed PRESIQ is part of a broader effort by the Brazilian government to revitalize its industrial base. This includes areas in which global competition has destroyed profits and where high input costs are a problem.
The post Brazil Braskem’s shares soar on the prospect of a tax incentive bill supporting the petrochemical industry may be updated as new developments unfold.
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