Polymer Market Analysis & Demand Signals

Propylene chain firm — PP benchmark up 24% year on year

Dalian PP futures are around 8,680 CNY/T, roughly 4% higher over the month and 24% above the same point last year, while PE has lagged at about 7,833 CNY/T after a sharp single-session fall. S&P Global expects rising supply pressure and uneven demand across the Asian propylene value chain through the remainder of 2026, so the spread between the two chains is the number to watch rather than either level alone.

Producers pushed PP up again in mid-August; polyethylene held flat

OPaL, IOCL and MRPL all raised polypropylene on 17 August — roughly ₹2/kg on homopolymer, ₹4/kg on film and lamination grades and up to ₹6/kg on random copolymer — with BOPP film following at ₹3/kg. HDPE and LLDPE were left unchanged in the same round, a clear split between the two chains. PVC is holding near ₹98,000–1,10,000/MT. With the rupee near 95.8 to the dollar, import parity is doing much of the work.

Recycled resin now trades below virgin — the premium has inverted

rPET flakes are assessed around €1,331–1,341/t and pellets €1,718–1,728/t DDP Northwest Europe, leaving flakes roughly €300/t cheaper than virgin PET — the first sustained discount in two years. Recycled demand is flat, with buyers reluctant to pay any premium while virgin is competitively priced and available. Mandated recycled-content grades are the exception holding volume.

Feedstock economics still favour ethylene over propylene

US contract propylene near 42 cents/lb against ethylene near 25 cents/lb keeps polyethylene producers structurally better placed than polypropylene compounders. Packaging demand is steady; durable goods and automotive remain the soft spots.

Hormuz disruption is tightening global polyolefin supply

Disrupted movement of PE, PP, crude and naphtha through the Strait of Hormuz has tightened virgin availability and lifted production costs, and is a principal reason European virgin prices have risen far enough to invert the recycled premium. Brent near $91.6/bbl compounds the effect. Regional producers retain a feedstock advantage on export offers where cargoes can move.

Recycling capacity growing; virgin imports exposed to freight and FX

Brazilian post-consumer capacity continues to attract European buyer interest, though the inverted virgin-recycled spread in Europe weakens the export case this quarter. Virgin import costs remain sensitive to currency and to the same freight disruption affecting Gulf cargoes.

The recycled premium has inverted

rPET flakes are trading roughly €300/t below virgin PET in Northwest Europe — the first sustained discount in two years, driven by virgin prices rising rather than recyclate falling. Buyers outside mandated-content grades are showing little willingness to pay up.

Hormuz disruption reaches polymer pricing

Constrained movement of PE, PP, crude and naphtha through the Strait of Hormuz has tightened virgin supply and raised production costs. With Brent near $91.6/bbl, this is the single largest input behind the current firmness in European and Asian virgin markets.

India: polypropylene up, polyethylene flat

OPaL, IOCL and MRPL each raised PP on 17 August — ₹2/kg homopolymer, ₹4/kg film and lamination, up to ₹6/kg random copolymer — while leaving HDPE and LLDPE unchanged. Converters running both chains are seeing their input costs diverge.

Asian propylene chain — supply pressure ahead

S&P Global expects rising supply pressure and uneven demand across Asia's propylene value chain through the remainder of 2026, with geopolitical risk continuing to drive feedstock decisions. PP futures are up 24% year on year even so.

PP–PE spread is the number to watch

Dalian PP near 8,680 CNY/T against PE near 7,833 CNY/T, with PP up 4% on the month and PE marginally down. US feedstocks tell the same story — propylene near 42c/lb against ethylene near 25c/lb. Compounders exposed to propylene are carrying the cost.

PVC firm on construction and tighter imports

Chinese PVC futures around 4,610 RMB/MT and Indian levels near ₹98,000–1,10,000/MT, supported by infrastructure demand across South and Southeast Asia and by tighter import availability.