North American plastic resin prices rose in the last week of February on geopolitical factors and tariff threat
Prices for Polyethylene (PE) and Polypropylene (PP) in the North American market rose by half a cent across all segments during the week of February 17, Resintel reports in its update to the Resinsights analytics platform powered by Plastics Exchange.
Over the past 15 days, PE resin saw the highest number of transactions, driven primarily by export demand. Meanwhile, US buyers reduced their activity as sellers tried to raise resin prices.
Resellers took advantage of high-priced alternative offers, keeping older, cheaper inventories sold. However, they chose not to replenish at higher prices, due to uncertainty in near-term demand, according to Resintel.
Geopolitics impact plastic resin prices
The US plastic resin market has been under pressure in the first few months of the year. Ready resin availability was limited, although the past week saw an increased flow of domestic railcar offers.
According to the Resinsights report, this could indicate that buyer resistance is holding back material at production levels, which in turn encourages more spot sales.
Factors keeping resin manufacturers on their toes include:
- Rising geopolitical conflicts
- Pending and potential tariffs
- Logistical constraints
Low demand and tariffs create uncertainty
Weak resin demand in Europe has been exacerbated by uncertainty over US support for Ukraine, forcing industry players to remain agile in their business decisions.
In addition, the deferral of Mexican and Canadian tariffs is set to expire on March 4, while new tariffs targeting the automotive, semiconductor and pharmaceutical sectors could be implemented in April.
While these tariffs could encourage relocation and strengthen domestic manufacturing demand in the United States, they could also lead to more rigid inflation, leading the Federal Reserve to reconsider interest rate cuts, affecting the cost of credit for new investments and expansions.
International tensions and their impact on resin costs
The increase in sanctions and pressure on Iranian and Russian oil exports affect the economies of these countries, but also raise energy and raw material costs for China, whose economy remains unstable.
This scenario could generate disruptions in global trade flows, affecting shipping rates and the availability of equipment, key elements in the plastic resin supply chain.