WPC 2026: Chemical trade routes prioritize security over cost efficiency

This content is part of a series exploring key themes from the World Petrochemical Conference by S&P Global being held in Houston from March 23-27.

Global trade routes are undergoing their most significant transformation since the first Gulf War as companies prioritize supply chain security over cost efficiency, industry executives said at the WPC March 25.

"Unfortunately, every year we come up with a new definition of 'unprecedented,'" said Vishal Goradia, chief executive officer at Vinmar International, describing disruptions centered on the Middle East that have sent insurance premiums jumping to multiples of pre-crisis levels. "What matters now is nimbleness, strong systems and processes that let you respond to risk quickly."

The shift from purely economic decision-making to balancing affordability with reliability is reshaping where companies build capacity, according to Maarten Smeets, EVP global business development lead at Vopak. "Over the last decades, decisions were dominated by economics. Now, we're balancing affordability with security and reliability," Smeets said.

Security concerns

Early signals of route changes are already appearing in cargo flows, said John Moseley, chief commercial officer at the Port of Houston. Houston, the largest US port by tonnage, has seen "a noticeable increase in containerized chemical movements, both liquids and resins/plastics, up sharply in a short window" over recent weeks, potentially indicating increased flows to Asia and Europe.

The increased demand has been reflected in prices that continue to climb.

Platts, part of S&P Global Energy, assessed blow molding-grade high density polyethylene at $1,356/metric ton FAS Houston on March 25, up $353/mt from March 4.

"The number one priority is people's safety, that's non-negotiable," Maarten said, describing how his company maintains contingency plans while constantly reassessing risk and communications.

The panelists agreed the industry is moving toward a hybrid model between "just-in-time" and "just-in-case" supply chains. "Companies must understand trade lanes not only on cost and execution, but also geopolitical reliability," Goradia said, adding that some regions gain value simply through stability and predictability.

Moseley emphasized that proximity still matters, "the closest, lowest-transport-cost supply often wins, until risk forces a re-route." He concluded that the industry is entering "a period of massive route reshaping, and the industry doesn't yet know the full endpoint."