Middle East war cost for Europe: Polymer prices surge back toward pandemic-era highs

The outbreak of the Middle East war at the end of February triggered a sharp upswing across Europe’s polymer markets, with prices rising at varying magnitudes depending on product fundamentals. Polyolefins led the rally by a wide margin, while other polymer chains also moved higher, albeit at a more moderate pace, largely driven by cost inflation rather than imminent supply shortages.

Across the board, the market narrative shifted rapidly from demand weakness to supply security and cost inflation, setting the tone for a volatile, supply-driven environment.

Polyolefins bear the brunt of disruptions

European PP and PE markets underwent a rapid shift war in the immediate aftermath of the war, as surging energy costs and disruptions around key trade routes heightened concerns over supply security. Europe’s structural dependence on imports quickly came into focus, pushing prices sharply higher and injecting significant uncertainty into the market.

As the conflict deepened, import constraints became more pronounced. Suppliers from across the Middle East and Asia withdrew offers or delayed shipments, while rising freight and insurance costs further limited trade flows. This tightening environment strengthened the hand of regional producers, who reduced availability, applied surcharges and, in some cases, declared force majeure. Buyers increasingly turned to domestic sources or rushed to secure prompt volumes, reinforcing the upward price spiral.

LDPE hit all-time highs; HDPE, LLDPE, PP at highest since 2022

By mid-to-late March, the market had entered a steep, supply-driven rally. PP and PE prices posted cumulative gains of 100-110%, with PP reaching its highest levels since May 2022 and nearing pandemic-era peaks. Meanwhile, LDPE surpassed its previous 2021-2022 highs to hit record levels, while other PE grades climbed to their highest points since April-July 2022.

Despite this surge, underlying demand remained weak, resulting in a fragmented market marked by precautionary buying, limited liquidity, and growing concerns over the sustainability of further increases.



PET follows with supply- and cost-led gains

A similar but less extreme shift unfolded in Europe’s PET market, where initial energy shock quickly translated into higher production costs across the polyester chain. Prices rose steadily to hit highest levels since October 2022, approaching pandemic-era levels seen in 2021, though still trailing the peaks recorded in 2022.

The PET rally was driven by a combination of cost inflation and mounting logistical disruptions. Import flows from Asia and nearby regions were hindered by vessel rerouting and delays, while some suppliers withdrew from the market altogether. Concurrently, outages and force majeure cases at regional plants further tightened supply, increasing reliance on spot availability.

As March progressed, the market moved firmly into a supply-driven phase, with buyers prioritizing material availability over price. Upstream disruptions in PTA, MEG, and PX—combined with Europe’s structural reliance on imports—amplified cost pressures and reinforced bullish sentiment, suggesting that volatility and elevated pricing may persist even if energy markets show intermittent corrections.

Styrenics surge on cost pressure and supply risks

Meanwhile, Europe’s styrenics markets also transitioned into a sharply bullish phase, though primarily on the back of feedstock-driven cost inflation. Disruptions to feedstock flows and logistics triggered a steep rise in upstream costs, prompting producers to repeatedly revise prices, suspend sales, and struggle to keep pace with rapidly escalating production costs.

PS and ABS prices rose steeply, reaching multi-year highs—PS hitting its highest levels since July 2022 and nearing or breaching the May 2021 peak, while ABS climbed to its highest since August 2022, approaching 2021 levels though still below the April 2022 peak. The upward trend is prevailing in April, supported by surging styrene costs and tighter regional availability as producers limit sales or close order books.

Beyond costs, supply-side risks—particularly for ABS—became increasingly prominent. Disruptions in Asia, Europe’s key import hub, curtailed availability and pushed import offers sharply higher, reinforcing bullish sentiment. However, demand lagged behind the pace of increases, keeping buyers cautious.

PVC lags behind peers in March, recovery gathers pace in April

In contrast, Europe’s PVC market experienced a more measured recovery in March, primarily driven by rising costs rather than structural supply constraints. Following a prolonged downtrend since the April 2022 peak — interrupted only by short-lived fluctuations — prices began to recover in March as higher energy and feedstock costs prompted producers to shift toward margin restoration.

By late March, PVC values reached their highest levels since May 2023, although they remained 42-43% below their 2022 peaks, lagging behind other polymers that have already revisited pandemic-era highs. The impact of the war on PVC has remained largely indirect, filtering through surging energy costs, higher ethylene prices, and logistics bottlenecks rather than outright supply shocks. Despite these pressures, demand—particularly from construction—remained subdued in March, keeping buying largely need-based and limiting gains, leaving PVC lagging behind other polymers with a more gradual, negotiation-driven uptrend.

However, supply conditions have tightened to some extent in April. Maintenance schedules, delayed shipments, force majeure declarations, and cautious allocation policies have limited spot availability, while some producers have prioritized contract customers. At the same time, import flows have become less reliable due to longer lead times and elevated freight costs, with Asian and other non-European origins offering higher prices or facing delays amid Asian supply constraints linked to feedstock shortages.

Against this backdrop, producers have adopted a firmer pricing stance. April indications point to sizable hikes, often exceeding initial cost pass-throughs, as suppliers aim to restore margins amid rising production costs. Market intelligence suggests increases in the range of €345-450/ton, with some deals concluded at even higher levels depending on availability. Reduced allocations from key suppliers and sporadic availability in the spot market have further supported the uptrend, prompting some distributors to close order books early.

Gradual hikes may push polymers beyond past peaks

Looking ahead, polymer prices may continue to challenge — and in some cases surpass — their 2021-2022 peaks if upward pressure persists. During March, producers adopted a strategy of gradual but successive hikes, often revising prices on a weekly basis amid tightening supply and soaring costs.

Early market intelligence for April points to a continuation of this approach, with fresh hike expectations commonly ranging between €300/ton and €700/ton depending on product and supplier, alongside shortened validity periods and controlled sales. Should producers maintain this stepwise pricing policy while supply constraints and logistical disruptions linger, certain grades may follow LDPE in reaching new record highs, even as weak demand raises concerns about the sustainability of further increases.