Middle East turmoil fuels polymer surge / Feedstock spikes trigger record hikes / Converters hit by third cost shock / Demand falters as material substitution looms

PE: Polyethylene prices have reached unprecedented levels of volatility. Following the sharp rise in ethylene costs (up EUR 450/t), suppliers implemented further substantial increases, driven by the massive upheavals stemming from the Middle East conflict. In combination with the already painful increases for converters in March, PE is now on average EUR 1,000–1,200/t more expensive than in February. Advance purchasing by converters added further momentum to the price surge. Before the end of April, however, buying activity eased off, particularly as customers of the processors had reached their financial limits and scaled back orders. Overall availability of PE was nevertheless adequate, allowing producers to fulfil contractual obligations. However, the limited availability of the key feedstock ethylene did have a dampening effect on PE output. The upward price trend is expected to continue in May, as the ethylene contract is likely to continue its upward trend. Depending on the extent of the increase, the C2 reference could reach a new all-time high. For converters and their customers, the latest development marks the third major cost shock in recent years after the Covid-19 pandemic and the Russian invasion of Ukraine. Given the high volatility, there are major considerations in some markets – including packaging and piping – to replace plastics with other materials.

PP: With the closure of the Strait of Hormuz, the price of oil and naphtha continued to rise in March. It therefore came as little surprise when the propylene contract was fixed at a record premium of EUR 465/t at the beginning of April. Many suppliers in Europe were struggling with their plants, and there was also insufficient propylene available to increase PP production rates. In order to protect themselves from further price shocks, some customers brought forward their orders, meaning processors recorded increased demand at the beginning of the month. The result: a price explosion for all polypropylene materials. Compared with February, prices rose by up to EUR 1,200/t – almost doubling for contract business. Processors were forced to pass these costs on to their customers directly, which stifled the increase in demand almost immediately. Food and pharmaceutical packaging stood out, keeping volumes more or less stable. The automotive sector had tough discussions about passing on costs. In the construction industry, projects are being cancelled because the high prices are no longer sustainable – especially as other raw materials and construction materials have also surged in price. The outlook for May: prices are expected to rise further. Propylene could once again see a three-digit mark-up, and with the current tight supply, PP producers will likely demand additional percentage points. There is also currently a lack of competition from overseas. Although their prices are lower, deliveries are not being offered until the beginning of June. Until then, demand will likely continue to decline, as end customers of processors respond to this price shock by holding back on purchases as much as possible. Discussions with the PIE price panel indicated considerations of switching from PP to engineering thermoplastics. The argument is that the price gap has become very small, while significantly better product properties can be achieved.

PVC: The European PVC market experienced a significant imbalance in April. Rarely have such ambitious price demands on the part of producers met with such resolute resistance by converters. In the wake of the EUR 450/t increase in the ethylene contract, many suppliers attempted to impose hikes of a similar magnitude – which would have considerably boosted their margins and thus prompted criticism from the market. Despite intense negotiations and what, in some cases, were aggressive counteroffers, the producers did in fact manage to secure notable price increases. The key factor here was the tight supply situation, which greatly limited customers’ scope for manoeuvre. The development in demand, however, was deceptive. While converters are now recording more incoming orders, these are predominantly advance purchases aimed at hedging against further price increases. No sign of a sustained pickup in demand has emerged so far – especially not from the construction industry, which remains weak. The change in strategy regarding contracts, which is emerging everywhere, is striking. Quarterly contracts are increasingly being terminated and replaced by monthly price negotiations. In this highly volatile climate, producers want to be able to pass on cost increases more rapidly and directly instead of being bound by a contract for several months at a time. This trend is also evident among additive suppliers in some cases. The price rally is set to lose pace somewhat in May, since the ethylene contract should no longer rise so sharply and the supply situation should ease somewhat. Despite this, PVC prices can be expected to increase over the coming month.

Styrenics: The meteoric rise in the styrene reference (up EUR 469/t) was followed by astronomical premiums for styrenics in April, ranging from EUR 520/t to EUR 650/t. The price increases were most pronounced for EPS. The reason for the huge price surges, which were higher than ever before, was the disruption to global supply chains caused by the conflict in the Middle East. This massive increase in costs poses serious problems for processors, as they can only pass on the price increases with a delay – and often only partially, if at all. Against this sullen backdrop, further consolidation in the plastics industry is not out of the question. The upward trend in prices is set to continue in May, albeit not with nearly the same momentum as in April. However, producers will very likely want to factor in the latest increase in the styrene reference (up EUR 55/t) in May.

PET: The precarious situation in the Strait of Hormuz continued to dominate developments in the European PET market in April 2026. Due to the highly uncertain outlook for future supply, buyers remained desperately on the hunt for volumes despite persistently weak end markets. European producers attempted to run their plants at full capacity, as far as the availability of feedstock would allow. However, as stocks had already been depleted in March, production was only sufficient to keep operations running on a “day-to-day” basis. Imports of both PX and PET came back into focus following a prolonged period of restraint on the part of buyers – who had actually intended to focus more strategically on domestic supply this year. As prices skyrocketed, the European market became very attractive from the perspective of exporting countries. Nevertheless, the volumes were nowhere near sufficient to satisfy the anxious buyers. The result was price increases running into triple figures. The underlying shortage situation is unlikely to change much in May. Further significant increases are therefore to be expected, albeit perhaps not quite as sharp as in April.

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