August 2026: Commodity Resin Prices Drop

Following an initial agreement upon a U.S.-Iran ceasefire framework, the prices of five commodity resins trended downward heading into the third quarter with the sharpest drop initially seen on the polyolefins front. The potential for a significant drop in polystyrene (PS) prices was underway, with downward movement for both polyvinyl chloride (PVC) and polyethylene terephthalate (PET) likely. Barring major resin production disruptions, including those that may surface during hurricane season, a return to prewar supply/demand fundamentals was projected, with price corrections to the major spikes of the early second quarter underway.

Source: ExxonMobil

Below are the views of purchasing consultants from Resin Technology Inc. (RTi); David Barry, associate director of polyethylene (PE), polypropylene (PP) and PS for Dow Jones Energy (formerly OPIS’s PetroChemWire); Michael Greenberg, CEO of Resintel, the market intelligence service of The Plastics Exchange (TPE); Scott Newell, executive VP polyolefins at distributor/compounder Spartan Polymers; and Mike Burns of Plastic Resin Market Advisors.

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Addressing polyolefins’ price trajectory, Greenberg says that going into July, “The decline is not occurring in a straight line. Lower prices are stimulating demand, and resin availability is not unlimited across every grade. Producers are also throttling back reactor rates to prevent the large May inventory builds from becoming more burdensome. Still, buyers currently possess the leverage, and the market has moved from debating the size of June increases to considering how far contracts might ultimately decline this month and over the summer.”

PE Prices Drop

Having rolled over in May, PE prices were heading down by double digits in June, with market estimates of a 15¢/lb decline, according to Barry, Greenberg, Burns and Kevin Mekaru, RTi’s procurement director for commodity resins. These sources generally concur that further declines are underway. “It’s been a waiting game for processors,” Mekaru says. “I don’t think we have ever seen such huge price fluctuations in such a short period of time.” Going into May, PE prices had risen by a total of 45¢/lb.

“Processors have been running down their inventories, so we expect to see stronger demand in third quarter,” Barry says. Meanwhile, he notes that some resin suppliers have reduced export prices to pre-war levels, with as much as a 30¢/lb drop in some markets. These sources also expect plant operating rates to be reduced from the 90s, percentage wise, to the mid 80’s. According to Burns, PE inventory levels can only be reduced by substantial exports. “Suppliers will need to meet lower global price points to achieve this action,” Burns explains, noting that processors should continue to buy as needed given the emergence of downward price pressure and high supplier inventory levels.

Going into July, Greenberg believes market fundamentals have shifted. “Most PE producers still have June increase nominations of 10-20¢/lb in place,” Greenberg says, “but spot fundamentals no longer support those initiatives. Elevated inventories, falling ethylene costs, weak export pricing and improving availability have materially changed the conversation.” Greenberg sees the export market as remaining the principal source of weakness amid expanding production capacity.

PP Prices Drop

After dropping 7¢/lb in May, PP prices fell another 8.5¢/lb in June, tracking the movement of propylene grade monomer (PGP), which settled at 43.5¢/lb, with a further decline in prices expected through the third quarter, according to Barry, Greenberg, Newell and Mekaru. These sources venture that additional decreases could potentially wipe out the 30¢/lb increases implemented by suppliers.

Barry notes that spot PGP prices averaged 7-9¢/lb lower going into June, and he believes the petrochemical industry is likely to return to ‘pre-war’ levels of being oversupplied. Along with the other sources, Barry says that suppliers received a lot of push-back for their 7¢/lb non-monomer increase passed in April. Newell thinks that margin expansion was passed “during a panic time, but we’re returning to market fundamentals of too much supply and not enough demand.” Mekaru adds: “We have not seen the demand rate going up in the last couple of months after the surge that brought it up to 91%. It is now heading down.” Growth through May averaged about 6.5%, year-to-date, but as these sources note, this was largely attributed to prebuying, making it difficult to zero in on “true demand”. These sources also anticipate that plant operating rates will drop from the mid-80s, percentage wise, to as low as the high 70s.

“Many processors continue to believe PGP and resin have further downside, and there is little incentive to build inventory while upstream costs remain in retreat,” Greenberg says. “PP should continue to follow monomer lower unless domestic demand improves materially or another production disruption changes the balance.”

PS Prices Up Then Down

Prices of PS moved up in May between 8-10¢/lb, bringing the total increases since March to about 29-30¢/lb, according to Barry and Brian Balboa, RTi’s senior business unit leader for PS and PVC. Suppliers sought an additional 3-5¢/lb in June, but these sources doubt implementation success, primarily due to poor supply/demand fundamentals. This is underscored by Ineos’ closure of its Illinois plant, reducing it to production in Alabama and Mexico, while both AmSty and Total are looking for buyers. Balboa thinks suppliers may push through a 2¢/lb increase in line with the June benzene contract, which rose to $4.91/gal. However, spot benzene prices have been sharply declining with a “dramatic” drop in July benzene contracts expected to result in a significant drop in PS prices — potentially reaching double digits. The implied styrene price based on a spot formula (30% ethylene, 70% benzene) was down almost 13¢/lb through June, according to Barry.

PVC Prices Flat to Down

Prices of PVC, following their 8-9¢/lb March-April surge, remained largely flat through May and June, though suppliers were out with June 4¢/lb price hike, according to Balboa. He largely ties this to overall lackluster demand and some supplier inventory build-up, and he speculates there’s potential for a slight decrease of 2-3¢/lb within the July-August time frame. He notes that key feedstock prices were trending down and domestic suppliers were still feeling some pressure from China’s aggressive global PVC exports spree.

PET Prices Up, Then Down

Prices of PET moved up a total of 1-2¢/lb in the May-June time frame, but that increase was generally expected to be gone within the July-August time frame, according to Mekaru. He attributes this trend to raw material cost formulations, which were leveling off in step with crude oil prices declining significantly. There has also been a bit of constraint on some imported PET due to higher freight and transport costs, though some attractively priced imports are still playing a role in the market. He characterized domestic demand as relatively soft during the traditional busier season.