FX.co ★ Polyethylene Surges to 4-Year High

Polyethylene prices in China climbed above CNY 9,000 per tonne in March, the highest level in four years and a 45% increase since the start of the year. The surge followed supply disruptions and higher feedstock costs triggered by the war in the Middle East. The polyethylene and broader petrochemicals market has tightened sharply since the conflict involving Iran, Israel, and US forces escalated, prompting Tehran to attack vessels transiting the Strait of Hormuz and effectively halting exports from major plastic producers in the UAE, Qatar, and Saudi Arabia. The suspension of tanker traffic in the region also disrupted shipments of crude oil, LNG, and LPG, driving up feedstock prices for polyethylene producers in Asia and North America. In response to constrained global supply and stronger export demand, North American plastic manufacturers have ramped up capacity, and industry groups now expect North American output to reach a record high in March.