As the cost of building-block chemicals for plastics rises, all polymers could see higher prices, according to ICIS analysts. But resin buyers should approach projected price hikes with a note of skepticism, cautions ResinSmart.
The closure of the Strait of Hormuz caused by the Iran war is wreaking havoc for key Middle East exports, including polyethylene (PE), polypropylene (PP), ethylene glycol (EG), and methanol, and causing major price hikes on crude oil, chemicals, and derivatives, reports Joseph Chang, Global Editor, Chemical Business, at business intelligence firm ICIS.
Producer stock prices surge
Stock prices of US producers of PE, PP, EG, and methanol and derivatives are rocketing higher, writes Chang, noting that on March 12 polyurethanes producer Huntsman surged 8.9% and PE and polyvinyl chloride (PVC) producer Westlake was up 6.7%.
Force majeure declarations multiply
Moreover, many plants in Asia are cutting production rates or shutting down from lack of naphtha feedstock from the Middle East. “As of March 13, there were 31 force majeure or sales allocation announcements for chemicals in Asia and the Middle East, two in Europe, and one in the Americas,” writes Chang. Declarations of force majeure affected Dow’s Deer Park, TX, facility along with several LyondellBassel and Indorama sites in Europe.
“With prices for all the building block chemicals for plastics — ethylene, propylene and benzene — rising, all polymers could see higher prices,” said Ramesh Iyer, director, Polymers Americas at ICIS. “Availability of imported resins, especially acrylonitrile butadiene styrene (ABS) and polycarbonate (PC) from South Korea and Taiwan will be a challenge as multiple producers are considering force majeure [declarations]. Price increases were announced by multiple PP and nylon producers,” added Iyer.
Caveat emptor, cautions ResinSmart
That said, resin buyers in this volatile market would be well-advised to separate a narrative pushed by producers and driven by geopolitical headlines from actual data, according to Michael Workman of ResinSmart, a platform powered by RTi that provides market intelligence untainted by supplier influence to procurers and plastics processors.
In his most recent weekly resin market update, Workman offers insights on movements in the major resin families.
PE contracts set to rise
Polyethylene (PE) producers are attempting contract increases of up to 10 cents/lb for March and another 10 cents for April. If both land, PE contract prices could rise $0.15 to $0.20/lb through the first four months of 2026. However, the supply/demand fundamentals don’t fully support this level of increase . . . yet, writes Workman.
Feedstock costs drive PP, PS pricing
Polypropylene (PP) pricing is driven by propylene feedstock costs, not by demand. “Polymer-grade propylene (PGP) spot prices jumped sharply — trading in the 40- to 45-cent/lb range — and February PP contracts moved up 4 cents/lb, with a 2-cent March increase and 4-cent April increase now nominated,” writes Workman. Bear in mind that inventories sit around a historically balanced 37 days of supply, he adds. “If geopolitical tensions ease and energy markets stabilize, this momentum could reverse quickly — watch PGP, not PP headlines.”
Benzene spot prices have spiked significantly, pushing production cost pressure into polystyrene (PS). Producers are targeting 3 to 5 cent/lb increases for March, with April expected to follow. “Feedstock, not demand, is driving this. Downstream demand remains weak,” notes Workman.
Double whammy for PVC buyers
PVC buyers are facing pressure from two directions simultaneously, according to ResinSmart — a heavy turnaround season with major outages underway or planned across OxyChem, Shintech, and Formosa; and logistics disruptions tied to the Middle East conflict. February PVC inventories drew down by 26 million pounds to just 22 days of supply, below comfortable levels. Increases of 3 to 5 cents for March and 7 cents for April are proposed. The take from ResinSmart is that this is one case where the tightening of supply is not driven by a self-serving narrative but supported by data.
Slack demand for engineering resins
Across engineering resins, feedstock costs are rising, but demand is not. While cost pressure exists, buyers remain in a relatively strong position and should not concede to increases without evidence of supply tightening, according to ResinSmart.
“Producers are skilled at using geopolitical headlines to build pricing momentum — even when supply/demand data doesn’t fully support it. Ask for the data behind every increase request,” recommends Workman.
