Two months into war: China pressure reverses polymer rally in Asia, early cracks emerge in Türkiye, will Europe follow?

Eight weeks into the Middle East war, polymer markets across Asia, Türkiye and Europe have surged back to — and in some cases beyond — historical extremes at an unprecedented pace. What took nearly nine months - even longer in some products/markets - during the pandemic and Russia-Ukraine war in 2021-2022 has unfolded in just six to seven weeks this time, as severe supply disruptions from the Middle East and mounting logistics constraints pushed prices sharply higher across the board.

As April wears on, prices have not only erased the downcycle of the past two years but also returned to crisis-era peaks, with certain products even entering uncharted territory. Yet, despite the strength of the rally, the first signs of fatigue have started to appear in some regions.

India: PP, PE, PVC blinked first

India has been the first major market to show a clear reaction. After peaking in Week 15, PP and PVC prices returned to their highest levels since 2022, while PE exceeded those previous peaks. The magnitude of the rally was significant, with gains from pre-war levels reaching as high as 60–70%.

However, this strength proved difficult to sustain. As downstream resistance intensified, prices began to retreat. Lower-priced cargoes from China and Southeast Asia entered the market, triggering notable pullbacks emerging shortly after the peak. This early correction underlines the fragile nature of the rally in India, where demand has struggled to keep pace with rapidly rising costs.

Southeast Asia: Rally peaks shift later, divergence across products

A similar but more gradual shift is unfolding in Southeast Asia. The region saw a slightly delayed peak compared to India, with most products topping out between Weeks 15 and 17. While PP and ABS recorded gains close to 60%, PE showed a split trend, with HDPE and LLDPE reaching levels not seen since 2014 and LDPE returning to 2022 highs.

Unlike India, however, the correction has not been uniform. Lower-priced Chinese cargoes and re-exports from China have increasingly weighed on regional markets, opening arbitrage windows and accelerating the correction phase.

LDPE prices stood stable while HDPE and LLDPE prices respectively lost 4% and 9% in the past two weeks. PVC has already seen a sharp decline and styrenics markets have been down by 4-7% after peaking in mid-April, whereas other products such as PET remain firm at their recent highs. This divergence suggests that the rally in Southeast Asia is beginning to lose its broad-based momentum and is instead evolving into a more product-specific cycle.

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Türkiye: High premium attracts Chinese polyolefin imports; PVC, PET, ABS correct down

Türkiye, meanwhile, continues to stand out as one of the most extreme cases of the current rally. Driven by its strong import dependency and direct exposure to Middle Eastern supply disruptions, the market has experienced some of the sharpest increases globally. PP prices have surged back to 2022 levels, while PE has climbed to levels last seen in 2008. Even more striking has been the performance of ABS, which has posted triple-digit gains and reached highs not observed since 2021.

Unlike India and parts of Southeast Asia, however, the Turkish market has yet to show a meaningful correction in import PP, PE and PS markets in Week 17 (April 20-24), with arbitrage windows wide open to Chinese cargoes and Asian re-exports. China’s growing presence in arbitrage flows has started to cap further increases, particularly in polyolefins. Although import markets remain severely tight amid Middle East supply disruptions, local markets started to retreat this past week.

Türkiye’s PVC market has been the first to respond to the downturn in Asia while PET and ABS markets also followed suit.

Europe: The sharpest gains, the largest premium

In Northwest Europe and Italy, the rally has been even more aggressive. Supported by soaring feedstock costs and persistent supply constraints, prices have accelerated into territory that exceeds previous benchmarks. PE has led the surge, climbing to all-time highs, while PP has nearly doubled from pre-war levels and returned to its 2022 peak range. Other polymers, including PET and PVC, have also recorded substantial gains, with most products remaining at their highest points in Week 17(April 20-24).

Unlike Asia, where corrections have begun to take shape, the European market has shown little sign of easing so far, with prices largely holding at elevated levels.There are only minor price corrections observed this past week in LLDPE, PS and ABS markets while the sharpest gains have caused Europe to carry the largest premium, making it quite attractive for imports. Asian PP cargoes have already started to find their way to the region despite long transit times.

Will Europe follow suit?

Whether Europe can remain insulated from the correction seen in Asia will depend on how long elevated costs can outweigh weakening demand signals. As lower-priced cargoes continue to emerge from Asia and arbitrage flows increasingly redirect volumes toward premium markets, the pressure is likely to build.

In the near term, supply constraints linked to the Middle East will continue to underpin prices. However, the pace of the rally has already outstripped demand fundamentals in several regions.

The next phase of the market will hinge on a critical shift: not whether supply remains tight, but whether demand can sustain prices at historically elevated levels.

If Asia’s correction deepens and arbitrage flows intensify, Europe may not remain immune for long.