Let's take a look away from the sideshow of American politics and see how global materials makers Braskem SA and Reliance Industries Ltd. are doing.
Braskem is dealing with an economic recession and political turmoil in its native Brazil, but managed to double its EBITDA in the first quarter of 2016 thanks to strong results from its businesses in the U.S. and Europe.
Sâo Paulo-based Braskem ranks as North America's largest polypropylene resin maker. Strong PP demand there has its U.S. plants operating at full capacity.
U.S. PP production was up 8 percent for Braskem in the first quarter, while sales of the material were up 9 percent. This contributed to the quarter's $945 million EBITDA number — up 106 percent vs. the same quarter in 2015.
But resin demand in Brazil itself plunged 18 percent in the first quarter, as the country's economy continued to contract. The Brazilian economy shrank 0.3 percent for the quarter, marking the fifth consecutive quarterly decline.
President Dilma Rousseff also has been removed from office amidst a corruption scandal. Scandal reached Braskem in March when former Chairman Marcelo Odebrecht was convicted of money laundering, bribery and organized crime. This clearly was not the face that Brazil wanted to show to the world with the Summer Olympics opening in Rio de Janeiro on Aug. 5.
U.S. shares of Braskem stock began 2016 priced around $13.50, but were at $11.60 in late trading July 19 — a drop of 14 percent. The recent successful startup of its Braskem Idesa polyethylene/ethylene joint venture in Mexico provided a ray of light for the firm.
For Reliance — an Indian conglomerate with businesses ranging from oilfields to retail stores — petrochemicals EBIT jumped 20 percent to $416 million in the quarter ended June 30, which was the first quarter of the firm's 2017 fiscal year.
Officials with Mumbai-based Reliance cited higher PET resin and PTA feedstock volumes as a reason for the profit improvement, even as petrochemicals sales were basically flat vs. the year-ago quarter. Petrochemicals generated about 24 percent of the firm's total revenue for the quarter.
Reliance ranks as India's largest maker of plastic resins and is one of the world's largest PP producers. Its shares started the year around 1,015 rupees ($15.10) and were near that same level in late trading July 19. Share prices since Jan. 1 have been as low as 920 rupees ($13.70) and as high as 1,060 rupees ($15.80).