FACTBOX: Americas chemical market participants cautious amid war uncertainty

Market activity in the US and Latin America kept mostly quiet March 3, as participants across sectors continued mulling the impacts of the war in the Middle East on their local operations.

Across multiple commodities, sources shared expectations of incoming increases in freight rates, while several producers in the polyolefins sector have already announced increased pricing for March.

However, buy-side sources were taking a wait-and-see stance, trying to weather the current volatility. However, "if the war lasts longer, more orders will have to follow the new prices," according to a supply-side source with business in the Americas.

Trades

• Latin American participants expect freight rates from Asia to rise, while buyers were described as taking a wait-and-see stance, wary of higher prices.
• Even without direct supply interruptions, US aromatics participants noted that the risk environment alone was contributing to higher freight expectations and stronger replacement values.
• Across polyolefin markets, Latin American participants reported that fresh March offers from the US, China and the Middle East had not yet been posted.
• Asian polymer producers were heard withholding polypropylene and polyethylene offers "until they get a different instruction," a supply-side source said.
• Similarly, in the Latin American polyvinyl chloride market, several traders said PVC offers remained unavailable. A trader in Brazil reported that a producer from Taiwan "froze all offers," while in the West Coast South America region, whose main supplier is the US, there were also no offers available for March loading.
• A cautious approach extended to US aromatics and olefins markets, with an aromatics trader saying it has been "a hard time pegging where the market is" and olefin participants remaining in a wait-and-see mode gauging how long the disruption will last before acting.

Production outages

• Indonesia's Chandra Asri has reduced operating rates at its 590,000 mt/year polypropylene unit in Cilegon with immediate effect due to naphtha shortage on the back of the ongoing conflict in the Middle East March 3, according to a company source.
• QatarEnergy has said it will halt the production of some downstream products, including urea, polymers, methanol and aluminum, and other products in response to attacks on its facilities in two of its industrial cities, the company said March 3.

Prices

• Regional PP producers in South America were heard intent on raising their offers $50-$100/mt for March, empowered by expected higher pricing from Asia.
• South American PE producers were also heard intent on raising offers by $100-$150/mt from February to March.
• Brazil's Braskem announced a price increase policy for March 2026 for all PE and PP grades in their domestic market, up Real 250-500/mt, or $47.44-$94.89/mt, from February.
• Most US PE producers restated and revised upward previous price hikes, effective March 1, increasing offers across grades by 2-5 cents/pound.
• Argentine PE distributors were heard raising high-density PE offers to $1,270/mt, from $1,170/mt the previous week, even before having clear indications from suppliers.
• A PE trader said increases were not directly tied to disruptions in the US or the Americas, but instead to the fact that buyers are now dependent on their product. "As there is no cheap feedstock anymore in Asia, how could China offer product?" the trader said.
• Polyethylene terephthalate sources said uncertainty in the Middle East could push virgin pricing, with some already observing price hikes; but the specific impact on recycled resins remained an unknown.
• Participants in US intermediates markets were warily watching pricing upticks overseas, saying the conflict was causing huge increases and that it was better to wait for market volatility to subside.