Polyethylene Surges to 4-Year High

Polyethylene prices in China surged to over CNY 9,000 per tonne in March, the highest in four years to mark a 45% surge since the start of the year as the war in the Middle East cut key supply from the region and lifted feedstock costs for producers across the world. The market for polyethylene and other petrochemicals tightened significantly since the war between Iran and Israeli and US forces drove Tehran to attack vessels crossing the Strait of Hormuz, halting exports from major plastic producers in the UAE, Qatar, and Saudi Arabia. Additionally, the halt in tanker flows in the region suspended flows of crude oil, LNG, and LPG to trigger surges in prices of polyethylene feedstock for refineries and factories in Asia and North America. The tight supply drove North American plastic producers to increase capacity and meet higher export demand, driving industry groups to forecast record-high North American output in March.