Slow European construction activity weighs on petrochemical, steel, cement demand

European petrochemical, steel and cement markets have seen continued sluggish buying interest in the fourth quarter of 2025 as a result of muted European construction activity.

Petrochemicals

The European PVC market has seen slow demand from the construction industry in Q4 2025. PVC is used in numerous construction applications including pipes, window profiles and fittings. Buying interest from the window profile sector marginally outperformed demand for the pipe sector. However, quarter-over-quarter PVC demand slowed as consumers focused on capital constraints and inventories into the year-end.

Also, weather has become less favorable for construction. Another key development in Q4 was the news Nov. 11 that Ineos had filed or was filing an antidumping case to the Europe Commission on PVC. Consumers expressed concerns that if implemented, this could increase the cost of finished goods or increase imports of finished goods.

Platts assessed the FD Northwest Europe PVC spot price was at Eur780/mt Dec. 17, down Eur10/mt week over week.

Likewise, demand from derivative construction and industrial film sectors has continued to weigh on the European polyethylene and polypropylene markets in the final quarter of 2025. Pipe grade and film grade polyethylene faced pricing pressure across 2025 and coming into the final months of the year, amid an ample supply picture, which was met with low appetite from downstream sectors.

For polypropylene, along with the automotive sector, the construction sector represents one of the most significant consumers of polypropylene. Lower offtake from converters on the spot market amid lower productivity has compounded the oversupply situation in Europe.

Structurally, domestic volumes were stable quarter over quarter, with producers and distributors citing limited change or improvements. However, the availability of competitive imports, especially on the spot markets, had weighed the market and prices.

The outlook for the first quarter of 2026 has been bleak, with market participants citing limited expectations of improvements to fundamentals. A producer said that unless there was an increase in consumer confidence and macroeconomic indicators, there will be limited room for improved market fundamentals.

Platts, part of S&P Global Energy, assessed the European high-density PE100 Black pipe grade spot price at Eur1,050/mt DDP NWE Dec. 17, down Eur70/mt from the start of the quarter.

Steel

Steel demand across Europe remained largely subdued, with market participants pointing toward a weak construction sector as an explanation. The latest S&P Global HCOB Eurozone Construction PMI Total Activity Index registered 45.4 in November, rising from 44.0 in October, signaling activity contracted but on a lower level than the month prior.

 However, producers were cautiously optimistic for 2026 as the EU's Carbon Border Adjustment Mechanism comes into force. Combined with a proposed tougher safeguard system, which is expected to be introduced in Q2, import availability looks set to tighten. As importers look to avoid risk, domestic producers were preparing to replace import volumes, but at a premium. Also, the German government's Eur500 billion infrastructure fund was expected to provide a boost to the construction sector. Sources in Germany have bullish expectations stemming from the fund but say this may take time.

Platts assessed domestic rebar in Northwest Europe at Eur580/mt ex-works Dec. 10, stable week over week, but down Eur35 from the year's high of Eur625/mt April 23.

Cement

The European cement and clinker markets were quiet at the start of the quarter, but contract negotiations intensified, particularly for 2026 volumes. Many buyers delayed finalizing deals, waiting for clearer demand signals and competitive price offers.

Some buyers in Europe were reported to have agreed 2026 low chromium clinker contracts at $47/mt FOB with suppliers in Turkey, a year-over-year increase of $3/mt FOB.

The upcoming CBAM regulation was a major topic, prompting European producers to adjust pricing and contract structures, and incentivizing buyers to seek verified, audited suppliers to avoid default emission values.

Cement producers also began increasing prices to account for CBAM costs, adding environmental contributions based on the type of cement and prevailing carbon prices. Market participants reported that they had notified buyers of price increases (Eur 5-6/mt) and additional environmental charges (Eur6-8/mt) tied to CBAM compliance, with monthly validation based on EU carbon prices.

Italian buyers remained the top market for Turkish clinker exports in the first eight months of the year. However, the quarter saw fluctuating FOB prices for cement and clinker out of Turkey, with spot prices generally ranging from $45 to $47/mt for clinker and the mid-$50s/mt for cement. Freight rates softened toward the end of the quarter, supporting higher FOB price levels for Mediterranean producers.

Clinker supply in the Mediterranean and Europe remained tight, with spot availability limited.