Braskem (BRKM5) Jumps Nearly 10% as Congress Approves Chemical Industry Support Program
- Why Is Presiq a Game-Changer for Braskem?
- How Does Reiq Amplify the Impact?
- What’s the Timeline for Implementation?
- How Is the Market Reacting?
- Could This Reverse Braskem’s Cash Burn?
Braskem’s shares (BRKM5) surged almost 10% intraday after Brazil’s Congress passed a new bill to boost the chemical industry. The stock led gains on the Ibovespa (IBOV), peaking at a 9.38% rise before settling at a 4.25% increase by midday. The rally follows the Senate’s approval of the Special Program for Chemical Industry Sustainability (Presiq), which includes tax credits and extended benefits for eligible companies like Braskem. Here’s why investors are cheering—and what’s next for the petrochemical giant.
Why Is Presiq a Game-Changer for Braskem?
The Presiq program is a lifeline for Braskem, offering up to R$3 billion annually in fiscal credits from 2027 to 2029. Analysts at XP highlight two key incentives: (1) Industrial credits covering 6% of raw material costs (capped at R$2.5 billion, with 8% reinvested in R&D), and (2) Investment credits of 3% of gross revenue (limited to R$500 million sector-wide). These measures aim to stabilize Braskem’s cash Flow amid global petrochemical margin pressures.
How Does Reiq Amplify the Impact?
The bill also expands the existing Reiq tax regime, raising credits from 0.73% to 5.50% in late 2025 and 6.25% in 2026 on naphtha purchases. According to XP analyst Regis Cardoso, this could add $25 million to Braskem’s 2025 EBITDA and $300–380 million in 2026—a 55–70% jump versus trailing figures. "These credits don’t create new fiscal burdens and can offset most federal taxes," Cardoso noted.
What’s the Timeline for Implementation?
With Senate approval secured, the bill now awaits presidential sanction. President Lula has 15 business days to sign or veto it. If enacted, the measures take effect in January 2027. Market Optimism is high—Braskem’s shares previously rallied 6% when the bill cleared the Chamber of Deputies in July.
How Is the Market Reacting?
Braskem’s stock hit R$8.34 by 12:40 PM BRT on November 20, 2025, with XP maintaining a "neutral" rating but a R$14 price target (75% upside). The BTCC team observes that Braskem could capture half the program’s maximum credits (US$1.5 billion) through 2029. TradingView data shows BRKM5’s volume spiking 220% above its 30-day average during the rally.
Could This Reverse Braskem’s Cash Burn?
Presiq’s credits may finally stem Braskem’s recurring cash losses. "This is a substantial relief," Cardoso emphasized, pointing to weak global spreads. The company’s Alagoas salt mine liabilities remain a wildcard, but for now, policy tailwinds are stealing the spotlight.
