Tariff uncertainty affects demand of US polymers, sources say

This content is part of the WPC 2025 series, where we explore key themes from the 40th annual World Petrochemical Conference.

Uncertainties regarding the imposition of higher import tariffs by the United States have impacted demand for the country's polymers, market participants say, further minimizing appetite for new resin as global trade dynamics become less clear.

US President Donald Trump said on March 6 that he will once again postpone the imposition of tariffs on some imports arriving in the country from Canada and Mexico.

Amid uncertainties, a US-based polymers trader said on March 6 that tariffs have been impacting business "a lot". The source said that "Chinese customers don't want to take risks, and European customers face potential risks."

Platts, part of S&P Global Commodity Insights, assessed high density polyethylene film FAS Houston at $992/mt on March 5, flat on the week.

A second source said that the expectations about the imposition of 25% tariffs on Canada and Mexico is causing "an incredible amount of uncertainty," adding that the impact of tariffs on Canada would be "larger" than tariffs on Mexico on the US construction market.

A polyvinyl chloride market source mentioned "panic for those whose major suppliers are in the tariffed countries."

In South America, where the United States serves as the primary supplier of polymers, concerns arise regarding the potential impact on US material volumes and the likelihood of redirected flows between producing and purchasing countries.

According to sources in Brazil, the current situation is characterized by uncertainty. A local trader of polyethylene, polypropylene, and polyvinyl said demand for US material is currently lower, with "companies reducing inventories and looking at re-exporting from Asia."

The same source added that despite concerns about potential tariff impositions, many are already taking the stance that the United States will remain a viable purchasing option.

Prices downtrend

Higher tariffs are, in theory, inflationary, and some participants are bracing for higher costs.

The third source said that there are expectations that prices for goods will rise if imports are subject to tariffs or if consumers opt to purchase domestically produced goods or raw materials.

At the same time, market participants have been talking about a price downtrend. This is because, in recent months, Overall demand in the polymer market has been reported to be weak.

"The price trend is currently weak, but I don't know if it was caused by tariffs. Everything is connected," the first trader said.

In the Brazilian polyethylene import market, another issue on the table is the anti-dumping investigation against material from the US and Canada, which is still ongoing.

A second Brazil-based polymers trader said that "the Brazilian market thinks that with a possible anti-dumping measure, US exporters will lower prices to compensate for this."

But the same source added that this is not likely to happen "because there is no margin to lower the price by $200/mt."

"Before that, we need to see if another market can absorb this volume at a better price—there is probably another market," the trader said.

Platts assessed spot HDPE film CFR Brazil at $1,080/mt Feb. 26, flat on the week.

A distributor in Argentina said the position of some business leaders to dismiss serious effects from the tariffs is overly optimistic.

"In the US, they have Tinkerbell thinking: If you believe with all your heart, it will happen. It's the simplistic Peter Pan thinking. But if you have a 25% tariff, you will lose your business to other countries without tariffs," the source said.