FACTBOX: Middle East uncertainty causes significant increases in chemical markets

Several US chemical markets reached pricing levels not seen since last year, aligning themselves to the upward trend worldwide caused by the geopolitical uncertainty stemming from the war in the Middle East.

Participants continued to increase the risk premium associated with the current situation, following steep reactions in the upstream crude oil sector. Disruptions in the Strait of Hormuz, the escalation of US-Israeli military action in Iran and expectations for a prolonged conflict are all contributing to the heightened uncertainty trickling down to petrochemicals.

Olefins

• Platts assessed FD US Gulf Coast polymer grade propylene at 40.25 cents/pound March 5, up 2.50 cents/lb day over day and up 6.75 cents/lb from Feb. 26, reaching levels not seen since March 6, 2025.
• March spot FD Mont Belvieu ethylene was similarly up 2.875 cents/lb day over day and up 6.50 cents/lb from Feb. 26 to 24.25 cents/lb on the same day at six-month highs.

Polymers

• US homopolymer PP FAS Houston rose to $1,091/metric ton March 5, up $55/mt day over day and up $165/mt from Feb. 25, reaching a level not seen since June. 5, 2025.
• FAS Houston PE spot export prices recorded their largest week-over-week increase on record, with spot export low-density PE at $1,168/mt FAS Houston March 5, up $121/mt week over week and reaching levels not seen since August 2022. Both linear low-density PE butene blow molding-grade high-density PE climbed $165/mt over the same period.
• Brazil PP homopolymer and copolymer CFR Brazil both had a weekly increase of $100/mt March 4, the biggest seen for the market since 2021, reaching $1,060/mt and $1,075/mt, respectively.
• PE and PP prices in South America's Mercosur region reached five- to 12-month high levels, with increases of $30/mt for both PP grades and of $55-$165/mt across PE grades.
• West Coast South America PP spot import CFR prices climbed to their highest level in 10 months, driven by higher cost pressures in Asia, specifically concerns about limited supply due to the war in the Middle East, along with shipping and production disruptions.
• Brazil polyvinyl chloride was assessed at $895/mt CFR Brazil including duties March 4, up $90/mt week over week. It was the biggest weekly increase since Dec. 14, 2022, when prices rose by $110/mt.

Benzene and derivatives

• The USG benzene spot market hit an 18-month high March 3 at 324 cents/gallon DDP, marking the highest level since Sept. 6, 2024, when it was assessed at 328 cents/gal.
• The benzene uptick also affected downstream nylon 6 and nylon 66, which themselves hit their highest levels since February 2025, with Platts assessing nylon 6 at 100 cents/lb ex-works Southeast and nylon 66 at 150 cents/lb ex-works Southeast March 4.
• The US styrene and its derivatives chain reached pricing levels not seen in at least four months, with FOB US Gulf Coast styrene at $1,215/mt March 5, at levels not seen since Feb. 19, 2025.
• Down the styrene derivatives chain, both US export high-impact and general-purpose polystyrene rose $55/mt over the Feb. 25-March 4 period, at eight-month highs, while US acrylonitrile-butadiene-styrene rose to just shy of the 90 cents/lb level, at an assessment not seen since almost a year prior.
• Concerns amid the war in the Middle East also pushed European styrene prices to their highest level since May last year, at $1,319/mt FOB Amsterdam-Rotterdam-Antwerp March 4, with a $128/mt increase seen since Feb. 27, before the conflict started.

Octanes/aromatics

• US Gulf Coast MTBE hits its highest price since Oct. 9, 2024, rising by 19.58% from Feb. 27 to March 5, with continued upticks expected in the near term as gasoline prices surge amid the US-Iran conflict.
• US Gulf Coast nitration-grade toluene was assessed at 322 cents/gal FOB USG March 5, while mixed xylenes were assessed at 321 cents/gal. Both reached their highest levels in about 19 months, as sources said aromatics values should continue to follow gasoline fundamentals.