Three weeks into the Middle East conflict, global polymer markets have continued their strong upward trajectory, extending gains triggered by initial supply disruptions. What started as a supply shock has now evolved into a broader cost-driven inflation cycle across the petrochemical chain, with both feedstocks and polymers rising sharply. However, with crude oil prices showing signs of a sharp correction after reaching multi-year highs, market participants are now questioning whether the rally can sustain into week four.

Polymer prices have recorded significant increases across major regions since late February, with Asia leading the surge before Europe began catching up.

Asia leads gains while Europe accelerates

Asia remained at the forefront of the rally in the third week. Southeast Asia saw polypropylene (PP) rise by around 48%, polyethylene (PE) by 46–49%, and PVC by up to 50%. India also recorded strong gains, with PP up 48%, PE rising as much as 55%, and PVC increasing by 51%.

China showed signs of partial stabilization in some segments but still posted strong cumulative gains, particularly in PVC (around 38%) and PET (41–42%). The strength across Asia reflects heavy reliance on Middle Eastern supply for polyolefins, while feedstock disruptions have also impacted PVC production despite its limited direct dependence on the region.

Europe, meanwhile, displayed a catch-up trend, especially in polyolefins. PP increased by 36–45%, while PE rose by 40–46%. Downstream products such as polystyrene (PS) and ABS also gained, reflecting delayed cost pass-through.

Turkey and Egypt face extreme volatility

Markets closer to the disruption zone experienced the most intense volatility. Turkey saw some of the sharpest increases globally, with PP up 56%, PE rising between 42–60%, and ABS surging up to 70%. Egypt also recorded strong gains, with PP rising 45%, PE up 34–37%, and PET showing highly volatile increases of up to 65%.

In both markets, rapid price fluctuations were reported, with offers changing daily or even within the same day due to ongoing supply uncertainty.

Early signs of divergence emerge

Despite the overall bullish trend, some divergence is beginning to appear. Styrenics such as PS and ABS are showing signs of stabilization or partial correction in certain markets, particularly in China. Polyolefins remain the strongest segment due to tight supply, while PVC continues to surge globally due to feedstock shortages. PET is increasingly being driven by upstream cost pressures rather than supply constraints.

Week four outlook: uncertainty rises

Oil markets have played a critical role in shaping sentiment. Brent and WTI prices surged above $112 and $98 per barrel respectively last week, even approaching $120 intraday. However, a recent announcement delaying planned US strikes on Iranian infrastructure triggered a sharp correction, with Brent briefly dropping below $100 per barrel before partially recovering.

This shift introduces three possible scenarios for the coming week:

Temporary correction: If crude prices remain weak, polymer markets may face short-term resistance, with buyers delaying purchases and sellers struggling to maintain peak levels.
Decoupling from crude: Supply constraints and ongoing logistics disruptions may keep polymer prices elevated even if crude softens, creating a temporary disconnect between upstream and downstream markets.
Sharp reversal risk: If geopolitical tensions ease and supply from the Middle East resumes, markets that have surged 40–60% could see equally sharp corrections.

Overall, while the rally remains intact, the fourth week is expected to be highly volatile, with market direction increasingly dependent on developments in crude oil and geopolitical conditions.

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