Iran Conflict Spurs Resin Price Surge

At a Glance

• PE prices jumped $0.03/lb, and continued to climb as international buyers scrambled to replace Middle East & Asian supplies.
• PP spot prices climbed $0.10/lb domestically driven by soaring propylene monomer feedstock costs.
• US producers emerge as primary beneficiaries with competitive feedstock costs and stability.

The Iran war/conflict/strategic strike — the nomenclature apparently is in flux in Washington — has upended the petrochemicals industry and, by extension, global plastics trade. In fact, the resin and upstream markets, both international and domestic, delivered the highest weekly transaction volume in the 25-year history of the Plastics Exchange, reports the Resin sights newsletter, which is produced by Resintel, an affiliate of the Plastics Exchange Market Intelligence Services.

“What began as a sharp reaction to the outbreak of war between the United States/Israel and Iran quickly evolved into a full-chain disruption across the global petrochemical complex,” writes Plastics Exchange CEO Michael Greenberg. “By Friday afternoon [March 6], the entire system, from crude oil and natural gas liquids to monomers and polymers, had rallied sharply and closed the week into significantly new cycle highs. It could potentially accelerate from here, depending on war developments, duration of the conflict, and if more substantial infrastructure damages occur,” notes Greenberg in the newsletter reporting on the week of March 2.

Resin market activity

Polypropylene (PP) trading edged out polyethylene (PE) sales in the first week of March. Exports exceeded domestic business at the Plastics Exchange, and prices for all commodity resins climbed throughout the week.

Even as the trading volume hit record levels, US resellers and traditional exporters saw a reduced flow of resin, as producers initially focused volume sales through their own international groups and offshore joint venture teams. The Plastics Exchange expects better liquidity to develop through the reseller community as producers increase operating rates and utilize these channels to funnel demand for incremental sales.

PE prices jump

PE prices stepped higher the week of March 1, as global buyers began to scramble for replacement supplies outside of Middle East and Asian sources. 

PE prices jumped about $0.03/lb out of the block, reports the Plastics Exchange: Material began to get scooped up and replaced by higher priced offers, which were also quickly grabbed.

International buyers led the way, clearing available lots, both prime and off grade, without hesitation. Buyers that tried to negotiate a half-cent or penny saw the opportunity evaporate, and quickly came back to pay up for the next offer, as it seemed there would be no quick fix. Prices continued to step higher: By midweek, most PE producers revised their $0.05 to 0.07/lb March contract increases to a full $0.10/lb.

Rapid rise in spot PP prices

PP followed propylene monomer sharply higher the first week of March, as soaring feedstock costs, tightening availability, and a surge in international demand pushed spot resin prices up rapidly across both domestic and export markets, according to the Plastics Exchange.

The rally was driven primarily by the explosive move in polymer-grade propylene (PGP), which surged more than $0.11/lb during the week to reach $0.45/lb, its highest level since early 2025. With PP contracts tied directly to monomer costs, the spike in PGP quickly translated into higher spot resin prices and set the stage for a substantial March contract increase. 

Spot PP activity was heavy throughout the week at the Plastics Exchange, as buyers moved to secure material before prices moved even higher. Domestic homo-polymer prices climbed daily, as offers were scooped up and replaced with higher priced availability, which also promptly cleared. By March 6, daily gains accumulated to $0.10/lb in the domestic market.

In an ultra-rare occurrence at the resin clearinghouse, PP exports nearly matched domestic sales. Much of the domestic buying was defensive in nature as converters attempted to secure spot supplies ahead of an expected contract price surge, writes Greenberg.

A win for US PE, PP producers

The week marked a turning point for global polymer markets. What began as a regional conflict rapidly evolved into a structural disruption affecting energy supply, petrochemical feedstocks, shipping routes, and global resin trade flows. The closure of the Strait of Hormuz, attacks on major refining and natural gas liquid infrastructure, and feedstock disruptions across Asia have collectively removed significant volumes from the global supply chain, at least temporarily, according to Greenberg.

North American producers are emerging as the primary beneficiaries of this shift. With competitive feedstock costs and operational stability, US PE and PP producers are increasingly positioned as the substitute supplier to global markets suddenly short of Middle Eastern and Asian supply, writes Resin sights.