How did the Mid-East war shock Asian polyolefin markets just in one week?

The Middle East war has left one week behind with big reverberations on the rest of the world, as the region is not only a major exporter of crude oil, LNG and LPG, but also a crucial seller of petrochemicals. Asian markets are feeling the pain. The question now is: is there more ahead?

Asian petrochemical markets witnessed a rapid chain reaction:

• Energy and feedstock costs surged


• Force majeures declared, crackers cut run rates


• Freight surcharges emerged


• PP and PE prices climbed across Asia

Sellers have widely withdrawn their offers, looking for clarity.

The impact has not been uniform across the region.

China has mainly felt the shock through the cost side, with higher feedstock prices squeezing margins and the lack of feedstocks forcing crackers to trim operating rates or declare force majeures.

Meanwhile, Southeast Asia and India are facing a double pressure — rising costs and tightening supply of Middle Eastern PP and PE, on which these markets remain heavily dependent.

Many re-export offers from China were reported across Southeast Asia last week while India’s local markets witnessed their largest gain since the pandemic.

If disruptions persist into this week, further sharp increases in polyolefin prices appear increasingly likely.