Market outlook for plastics resin in 2026

The new year began with what Michael Workman of the ResinSmart resin pricing platform calls a black swan–type event: The US “move to effectively capture and control Venezuelan oil production. While this is primarily an energy and geopolitical story, it does have implications for the North American plastics industry—and more importantly, for how resin buyers should be thinking about price risk and volatility in 2026,” writes Workman. While this is not a direct resin supply story — “there is no sudden wave of Venezuelan PE, PP, or PVC heading into North America,” he notes — it may matter at the margins for polypropylene, polystyrene/ABS, and some engineering resins, according to Workman. “The US move in Venezuela is not a game changer for resin pricing in 2026, but it is a new variable that adds complexity to an already noisy market,” writes Workman.

For those tasked with purchasing resin in the new year, Iyer projects more spend could be allocated on spot vs. contract purchases. “Throughout 2025, spot prices have been lower than contract prices for many resins.”

Barring a severe weather event, the current resin supply situation suggests that, if a resin buyer were planning to allocate 80% of its purchases to contract buys, a more reasonable contract-to-spot mix might be 70-30 for some commodity resins.

There may be a slight price increase in polypropylene in the first quarter of 2026.

In terms of polypropylene, Iyer forecasts “maybe a slight price increase going into Q1. Typically, there are low-priced spot offers at year-end. Given the current inventory levels and projected stability in pricing, very few companies are motivated to prebuy.”

As for refineries, Iyer doesn’t see their production rates declining. “They’ve been running at 90% to 95%. Propylene inventories are quite healthy, and their products go into fuel as well.”

Going into the new year, “it’s not a bad time to sack away a few extra pounds” of polypropylene, Greenberg advised. “The market’s a lot more stable and demand is a lot more consistent at this point. I don’t see a reason for prices to get out of hand to the upside.”

What moves resin prices

Prices of the fundamental resins PE and PP are driven by slightly different variables. Supply and demand balances greatly influence price. Feedstock monomer costs factor less into PE pricing, while the volatility of propylene monomer more strongly influences PP costs. Contract versus spot purchasing is yet another variable.

Worldwide polypropylene production is largely derived from the crude oil chain. But that’s changing as propane dehydrogenation (PDH) units built in North America and other regions can turn propane directly into propylene monomer. International PP trade patterns began shifting with these regional cost advantages. 

PDH units have generally increased propylene monomer supplies with less expensive feedstocks to make the US more competitive and reduce volatility in monomer prices.

Resin production basics

The vast majority of all polyethylene produced in North America is derived from the natural gas chain. Natural gas on this continent is very wet, unlike the dry natural gas found throughout much of the world. While dry natural gas is essentially methane, wet natural gas contains more complex liquids like ethane, propane, and butane.

 “When natural gas and shale is extracted from the ground, it contains large amounts of natural gas liquids,” Greenberg noted. The more complex the hydrocarbon, the greater the percentages of higher-value byproducts can be extracted when that liquid is processed through a cracker facility. When ethane is “cracked,” ethylene is the primary byproduct, as well as some propylene among more than a dozen other byproducts. When propane is cracked, ethylene is still the primary byproduct, but far more propylene is recovered as well. 

 For the rest of the world to get ethylene and propylene with its mostly dry natural gas, other regions must rely on the refining of various grades of crude oil and naphtha. But to ship the byproducts of natural gas overseas from North America is quite expensive, requiring a significant amount of energy to freeze those gases into liquid and keep them cold. Exporting PE in pellet form is far more efficient and cost-effective. 

Contract or spot purchasing?

Manufacturers purchase resin on a contract or spot basis, depending on their needs – including grade consistency and volume requirements. Resin can be purchased through contracts with resin producers or distributors, or on the spot market from producers and resellers.

The benefit of contracts is that those customers get material before spot purchasers, and material prices rise and fall a little slower than they do on the spot market. However, contract purchasing carries a higher premium over the length of the agreement. Meanwhile, the pros of spot contracts are generally cheaper prices – unless the market is up, in which case spot prices rise faster and higher than contract prices. Spot market volatility continues with prices falling faster and farther in down markets. Contract pricing generally moves monthly, while spot markets can change daily – or even with each transaction.

Contract purchasing comes in several varieties, including:

• Monomer plus margin with monomer price tied to a market index;
• Contracts tied to various independent resin pricing indices.

At a Glance

• The year ended with lower prices for major commodity resins, and reports indicate prices for some could be higher in 2026.
• US control of Venezuelan oil won’t affect resin pricing in 2026, but it does add new complexity to an already noisy market.
• There may be a slight increase in polypropylene prices going into Q1 of 2026.

Tariffs imposed by the Trump administration roiled every aspect of manufacturing in 2025 — and for plastic resin, impact varied by product based on whether the US was a net importer or exporter of that particular resin. 

The resin picture for 2025 showed the year ending with prices lower for the five major commodity resins — PE, PP, PS, PVC, and PET – and reports indicate prices for some could be higher in 2026.

As this tumultuous year wraps up with a Supreme Court ruling on Trump’s tariffs looming, the plastics industry has endured “a grinding yearlong correction,” according to Michael Greenberg, CEO of The Plastics Exchange in Scottsdale, Arizona.

It’s been a very interesting and dynamic year,” Greenberg summarized. “There have been a few major catalysts to drive change to the market. We’ve been in a general environment of oversupply, highly competitive international markets, and under the whole feeling of tariff and economic uncertainty. You put all that together and you’ve had somewhat of a cautious stance from buyers and suppliers/producers doing their best to maintain high operating rates and export what they can while trying to maintain good, fair pricing and margins.