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Investor Presentaiton

2016 Braskem | Annual Report 38 RAW MATERIALS AND SOUND PETROCHEMICAL SPREAD LEVELS The average international spread of thermoplastic resins produced by Braskem in Brazil remained at a sound level, reaching US$ 677 per ton in 2016, down 3% from the previous year's average spread.⁹ Polypropylene (PP) spreads in the United States were US$ 702/t, which was 24% higher than the previous year, due to a combination of a larger propylene supply and greater PP demand in the US market. For the year, the average price of propylene in the American Gulf (USG) was 12% lower compared to 2015, reaching US$ 759 per ton due to the greater availability of the input in the region.10 Also in 2016, the average oil price was US$ 43 per barrel, 17% lower than the average price in the previous year. This drop was reflected in the average price of naphtha in the international market in 2016, of US$ 385/t, a drop in line with the drop in oil prices when compared to the previous year. NET REVENUE 2016 Braskem's consolidated net revenue reached US$ 13.7 billion, which was 3% lower than in the previous year. The decline was explained by the 8% drop in the prices of resins and basic petrochemicals in the international market, due to lower oil prices and the new resin capacities, especially polypropylene, that began operating in China during the year. Another factor contributing to the decline was the decrease in sales volume in the domestic market, which dropped 1% compared to 2015. In Brazilian reais, consolidated net revenue was BRL 47.7 billion, which was 2% higher than in the previous year due to the depreciation of the Brazilian real from one period to the next. Excluding from the analysis the resale of naphtha/condensate, revenue increased by 1% in dollars and 6% in Brazilian reais. C-0152 9 Difference between the price of petrochemicals and the price of naphtha, ethane, and propane for the raw material mix used in the Brazilian units. 10 Difference between the price of US PP and US propylene.
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