Braskem's PE pricing in March has reduced by Real200/mt (around $53/mt) on all grades or "families" of PE, the source said.
"Point of attention is the upward pressure in the exchange rate in latest days," the source added.
Braskem will keep domestic prices for polypropylene (PP) stable this month as recent price trends in the Asian PP markets have mitigated currency pressure, the source added.
The Brazilian real weakened from an exchange rate against the US dollar of 3.7025 on February 14 to close the month at 3.7488, a difference of 1.3%, according to S&P Global Platts data.
Recent market feedback in Brazil centered on a possible March PE price cut from Braskem, with sources specifically pointing to elevated stocks in the region as a driving factor for weakened demand this year.
Falling import prices and an abundance of competitive US-origin PE were also responsible for falling demand, regional sources said this week. South American PE producers and import distributors were fighting for market share in Mercosur as buyers employed "conservative restocking strategies" while waiting out an import price floor, the sources added.
At least one other South American PE producer was heard lowering prices in Brazil, in line with Braskem's reduction, a market source said Friday. A US-based PE producer that regularly sells directly and through internal distribution channels in Brazil was also lowering prices by Real200/mt this month, the source added.
Import PE pricing in South America has been under sustained pressure since Q3 2018, coinciding with China's late-August implementation of a 25% tariff on US-origin high-density polyethylene (HDPE) and linear-low-density polyethylene (LLDPE).
With those key US-origin PE resins becoming uncompetitive in China, producers and traders spent much of the second half of last year looking for alternative export markets. The shift in tradeflows came at a time when the US was realizing record PE production tied to recent increases in regional capacity expansions, with LLDPE and HDPE dominating the first wave of additions and expansions.
Overall, CFR Brazil pricing has shed 17.1%-22.3% between September 5 and February 27, according to Platts data.
Domestic Brazilian prices, meanwhile, has come off by 27%-29.6% during that same time, while the local currency has strengthened against the US dollar by 9.6% in the last 18 months, according to Platts data.
The Brazilian domestic market was assessed lower across the board this week, with LDPE settling at Real5,000/mt and LLDPE closing at Real4,450/mt Wednesday. HDPE film, meanwhile, was assessed at Real5,100/mt after showing the biggest week-on-week decline at Real250/mt (around $67/mt), Platts data showed.
All domestic Brazilian assessments are made on a delivered basis into Sao Paulo (South and Southeastern Brazil) for material arriving by truck with a letter of credit of 28-35 days. The assessments are reflective of prices that include local PIS/COFINS taxes, per market feedback.