Light olefins
Overview
The global light olefins market is made up of ethylene and propylene monomers. These product markets can be affected by a great many factors.
Ethylene is the most widely used commodity chemical and is produced globally in all major regions. It is converted into many products used in daily life like plastic packaging, durable goods, hygiene products and other consumer items. The ethylene market is driven primarily by regions of low production cost and regions of high demand growth. Polyethylene, ethylene’s largest derivative, represents about 65pc of global ethylene demand. Anyone involved in the ethylene industry – directly or indirectly – needs market and pricing insight to anticipate supply shortages and potential swings in pricing.
Propylene is the second most widely used commodity chemical and is produced globally in all major regions. Propylene is a volatile commodity because of its predominantly co-product nature and unpredictable supply, but recently the industry has been trending to more on-purpose production. It is converted into many products used in daily life like plastic packaging, durable goods, automotive products, and woven fabrics. Polypropylene, propylene ’s largest derivative, represents about 70pc of global propylene demand. Anyone involved in the propylene industry – directly or indirectly – needs market and pricing insight to anticipate supply shortages and potential swings in pricing.
Our light olefins experts will help you determine what trends to track and how to stay competitive in today’s ever-changing global market.
Latest light olefins news
Browse the latest market moving news on the global light olefins industry.
Brazil watchdog clears IG4 path to Braskem control
Brazil watchdog clears IG4 path to Braskem control
Sao Paulo, 6 March (Argus) — Brazil's antitrust authority Cade has approved without restrictions a transaction that could transfer controlling-company Novonor's stake in petrochemical producer Braskem to an investment fund advised by IG4 Sol, marking a significant shift in a long-running dispute over control of the petrochemical producer. IG4 Sol is part of IG4 Capital, a private equity firm specializing in distressed assets. Its proposal involves acquiring Novonor's debt from a consortium of banks — including Itau, Bradesco, Santander, Banco do Brasil and national development bank Bndes — and converting it into equity in Braskem. This debt-for-equity approach could allow IG4 to assume Braskem's control without a direct share purchase. Braskem said it learned from Cade's website that the watchdog issued a decision authorizing the concentration act related to Shine I FIDC's acquisition of Novonor-linked credit rights backed by Braskem shares. The Shine I FIDC fund was created as part of the restructuring framework tied to Novonor's creditor-backed assets, and serves as the vehicle designated to receive the Braskem shares securing those obligations. The fund consolidates the credit rights involved and acts as the platform through which Braskem's controlling block would be transferred. The approval opens a 15-day window in which Cade's tribunal may decide to take up the case, but the green light removes a key regulatory barrier for the structure under negotiation. The decision contrasts with the extended review Cade initiated in early February, when the authority signaled it needed a deeper look at the implications of an investment fund entering Braskem's capital structure, even though the deal had originally been filed under the fast-track procedure. At the time, Cade also considered concerns raised by plastics association Abiplast, which briefly sought third-party intervention before withdrawing its request. The new approval now places Shine I FIDC and IG4 in the leading position to assume Novonor's stake. Braskem said on Friday that any final outcome remains contingent on the 15-day review period and on the various contractual conditions tied to Novonor's restructuring process. The company emphasized that it will disclose any further information received from Novonor, the fund or Shine I FIDC. Novonor, under judicial recovery, has been seeking a path to divest most of its Braskem holding while potentially retaining a small minority stake as part of its restructuring plan. State-controlled oil major Petrobras, Braskem's other major shareholder, had opted on 12 February not to exercise its preemption or tag-along rights in the potential transfer of Braskem's shares held by Novonor. The renewed clarity on the antitrust front arrives against a backdrop of financial and operational strain for Braskem. The company has faced tighter cash conditions, pressure from weaker petrochemical spreads and setbacks at its Mexican joint venture Braskem Idesa, while lower plant utilization and feedstock constraints continue to affect domestic output. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Falling mortgage rates may boost US housing, PVC
Falling mortgage rates may boost US housing, PVC
Houston, 6 March (Argus) — US mortgage rates this year have sunk to their lowest level in more than three years and could unlock more consumer demand in a housing sector that has faced falling affordability . But tepid early-year housing demand has left polyvinyl chloride (PVC) suppliers cautiously optimistic that demand in the housing market could strengthen compared with 2025, with most expectations centered around a repeat of last year. About 51pc of outstanding mortgages have interest rates below 4pc, according to third quarter 2025 data from the US Federal Housing Finance Agency. With current rates as much as 50pc higher, that means more current homeowners who would otherwise be in the market for a new home are staying put. Realtors and mortgage experts anticipate a nominal rebound in housing demand this year as average rates on a 30-year mortgage slumped below 6pc for the week ended 27 February — the first time in more than three years — before crawling back to an average 6pc this week, Freddie Mac data show. "Rates below 6pc are an important psychological milestone for both buyers and sellers," said Nadia Evangelou, senior economist and director of real estate research at the National Association of Realtors (NAR). "Nearly 5.5mn additional households can afford the median-priced home when rates fall from 7pc to 6pc." Housing affordability improved early this year on higher income and declining interest rates. Gradually higher purchasing power early this year underpins expectations of an 8pc increase in 2026 home sales and indicates an anemic US housing sector could be at an inflection point, data from the Mortgage Bankers Association (MBA) show. But new-home construction remains subdued, and a marginal decrease from 2025 is still expected. The MBA forecasts a 2pc decline this year in total housing starts from 2025, while the NAR projects a 1pc increase in single-family starts. Bullish demand signals in the domestic housing market have not shifted outlooks from PVC suppliers, who are maintaining tempered demand expectations from home construction. Current outlooks largely anticipate PVC demand into new-home construction to mirror 2025, which extended the multi-year demand slump in the sector. Instead, PVC suppliers are increasingly bullish on rebounding demand in the remodeling and wiring and cable industries, sources said. Residential remodeling activity is expected to grow by 3pc in 2026 and by 2pc in 2027, data from the National Association of Home Builders show. This trend is supported by an aging housing stock, homeowners locked into lower mortgage rates, and older homeowners not purchasing new homes. US home builders share the PVC industry's cautious outlook. A survey of home builders in February continued to paint a cooling new-home market, data from the NAHB/Wells Fargo Housing Market Index show. The leading concerns for surveyed builders are buyers waiting for lower mortgage rates, concerns about the broader economic environment, and high Federal Reserve interest rates. The US Federal Reserve is generally not expected to reduce its target interest rate in the first half of the year, with expectations of rate cuts in 2026 significantly dampened by stubbornly-high inflation and weaker-than-expected employment numbers in recent months, CME FedWatch data show. By Maya Porter and Gordon Pollock Mortgage rates vs. Residential construction permits Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
US PE gains edge as Braskem runs dry
US PE gains edge as Braskem runs dry
Sao Paulo, 6 March (Argus) — Brazilian polyethylene (PE) buyers are turning again to US product following the expiration of Brazil's provisional antidumping duty on US and Canadian material, while a ditributor for domestic producer Braskem has advised it is running out of product. The domestic supply picture deteriorated after a Braskem distributor notified clients in a 5 March letter that all grades were unavailable and that there was no forecast for new arrivals from its supplier. The distributor also noted that market participants were speculating about further price increases and that several product lines had already reached zero inventory, with the situation likely to worsen in the coming days. The combination of limited domestic availability and reduced import flows from the Middle East because the US-Israel war on Iran has increased reliance on alternative supply routes, particularly from the US. In light of the supply disruptions, the expiration of Brazil's provisional antidumping duty on US ($199.04/metric tonne) and Canadian ($238.49/t) PE has taken on heightened importance for the domestic market. The timing is critical because the conflict in the Middle East continues to disrupt shipping routes and constrain liftings, narrowing the supply available to Brazilian buyers just as logistical pressures intensify across global corridors. More than a tenth of the global container fleet is currently exposed to Mideast Gulf trade routes, which underscores the strategic weight of the region for world shipping, according to logistics provider Ceva, which also reported that over 140 container ships representing more than 470,000 TEU (twenty-foot container) are trapped or waiting in the Arabian Gulf, with security concerns and port disruptions slowing vessel movements. Freight markets have reacted quickly, with China-to-UAE spot rates rising by nearly 25pc since mid-February as carriers introduce surcharges in response to the rising uncertainty. War risk insurance premiums have increased fivefold, reinforcing the operational strain felt across routes linked to the conflict, Ceva said. Brazil antidumping duties end The sequence of events surrounding Brazil's antidumping investigation helps explain how this backdrop has shaped market behavior. The trade authority initiated the case in November 2024, issued a preliminary determination in August 2025 and extended the process to May 2026. A provisional duty was applied shortly after with a maximum duration of six months. In the absence of any government notice extending that measure, the tariff expired in February 2026, although the broader investigation remains active within its legal timeframe. Though new provisional duties could be applied at any time, buyers are willing for now to take the risk on ordering product from the US, particularly given the supply tightness and higher prices from local producer Braskem. Braskem had released its March pricing policy signalling a rollover for PE, but on 2 March it issued a revision lifting prices by $50/t. A second revision was announced on 5 March raising prices by an additional $318/t. The rapid succession of these increases, combined with the absence of domestic supply, pushed buyers to seek alternative sources at a time when regional and global logistics were already under strain. With imports from the Middle East constrained and domestic availability curtailed, attention has shifted back to US-origin material. US producers have also been raising prices, requesting increases of up to 10¢/lb, according to letters viewed by Argus . Despite these adjustments, US PE remains competitive for Brazilian importers because transit times are shorter, the US logistics network is unaffected by the conflict and the overall landed cost remains attractive even after a $12/t rise in freight on the Houston to Santos route. The combined effect of these pressures has prompted converters and distributors to revisit procurement strategies. Buyers are reassessing cfr offers from US suppliers, diversifying carriers to improve booking reliability and managing the balance between domestic and imported volumes as Brazilian prices move higher. With Braskem implementing consecutive price increases while holding less inventory and with Middle Eastern shipments facing serious operational constraints, US-origin PE has re-emerged as a practical and increasingly necessary second supply option, and its relevance is likely to grow in the near term as long as domestic replenishment remains uncertain and global shipping conditions continue to deteriorate. By Fred Fernandes Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
Mideast war to tighten LatAm polymer supply: Update
Mideast war to tighten LatAm polymer supply: Update
Add information on shipping at Strait of Hormuz, Red Sea and Mideast Gulf regions. Sao Paulo, 3 March (Argus) — The US-Iran war has heightened security risks across Middle East sea lanes and disrupted polyethylene (PE) and polypropylene (PP) flows into Brazil and the wider Latin American market as carriers suspend loadings, impose emergency surcharges and reroute vessels around the Cape of Good Hope. Some containership owners, such as CMA CGM, earlier announced an "emergency conflict surcharge" of $3,000/feu (forty-foot container), or $121/metric tonne (t), on all loadings from ports in the Mideast Gulf and Red Sea regions but have since suspended operations out of the Mideast Gulf. Shipping is now possible only from the Red Sea region and some ports outside of the Mideast Gulf, but the situation remains dynamic and it is unclear which carriers are still calling at these ports, particularly when sailings involve transiting through the Bab el Mandeb strait. Despite the cost surge, vessel space remains constrained as shipowners cut departures on high-exposure routes and roll bookings. Capacity tightness is most visible on short-notice shipments to South America's east coast, a global trader said. Rerouting vessels around the Cape of Good Hope is lengthening voyages and creating equipment imbalances, stretching lead times and undermining production planning for converters dependent on imported resin. Buyers report more blank sailings, delayed laycans and shifting arrival times as carriers adjust rotations. Additional insurance requirements and onboard security measures are adding time and cost, weakening schedule reliability into Santos, Manaus and other Brazilian ports. Transit through key canals is technically "restricted and unreliable" rather than fully closed, but the operational outcome is similar, with fewer departures from Gulf export hubs and fewer relay options into Mediterranean transshipment points, a source said. Equipment shortages on feeder services and rising premiums for guaranteed space are adding further friction. Higher landed polymer costs The conflict's immediate effect on Latin American polymer markets is rising landed costs. Import-parity formulas are absorbing new surcharges and longer routes, lifting cfr Brazil indications even without adjustments to fob values. If reduced departure frequency persists, participants expect spot tightness to surface into late March, particularly for PP grades with limited substitution options on the demand side. Domestic production can offset part of the shortfall but cannot fully cover a sharp reduction in Middle Eastern arrivals if carriers deepen schedule cuts. Middle Eastern suppliers remain central to Brazil's polymer balance. Saudi Arabia was Brazil's second-largest PP supplier in 2025, sending almost 140,080t, or 20pc of the country's imports. As for PE, Saudi Arabia ranked third at 56,445t, while Egypt placed fifth with nearly 47,795t last year. Brazilian polyvinyl chloride (PVC) buyers also increased purchases from Egypt by 68pc last year to around 100,090t. Converters are adjusting sourcing strategies by front-loading purchases, widening delivery windows and considering alternative origins with lower exposure to higher-risk routes, even when nominal resin prices are higher. "The situation will not normalize in one or two weeks," one source said. "News changes by the hour, owners are cautious, and freight alone will lift cfrs across Brazil and the rest of Latin America." Market participants describe the disruption as global. With elevated risk premiums and major carriers avoiding vulnerable passages, surcharges and extended transits are expected to persist, supporting delivered PE and PP values until security conditions allow a broader return to standard routes. Aiming to restore normal transits, president Donald Trump on Tuesday said the US will offer political risk insurance and naval convoys for ships transporting energy and other commodities through the Mideast Gulf. Meanwhile, Brazil petrochemicals giant Braskem has also adjusted its domestic pricing in response to the tighter logistics environment. The company withdrew the pricing policy it released on 28 February and issued a revised schedule on 2 March, increasing PE and PP prices across all grades. Braskem lifted LDPE, HDPE, LLDPE and metallocene PE values by R500/t ($95/t), with no bonuses applied. As for PP, the company raised homopolymer and copolymer prices by R250/t, also without bonuses. Market participants said the revision reflects both escalating freight costs and expectations of reduced availability from traditional import origins. Brazil's naphtha cost could rise The US–Iran conflict is adding pressure to Brazil's chemical chain through higher oil prices, exchange rate volatility and tighter availability of key feedstocks, chemical industry association Abiquim said on 3 March. While no physical disruptions have emerged, Abiquim warns that a sustained increase in Brent crude values will raise petrochemical naphtha costs, a structural vulnerability for a country that remains a net importer of derivatives. Rising energy benchmarks could narrow petrochemical margins and weaken Brazil's position against regions that produce more gas. Additional risks extend to nitrogen fertilizers and chemical intermediates, given Iran's role as an exporter of urea, ammonia, methanol and derivatives. Brazil imports about 85pc of its fertilizer needs, leaving agriculture and downstream producers exposed to potential price spikes. Abiquim also cited macroeconomic risks, with geopolitical uncertainty typically driving a stronger US dollar and raising import costs for industrial inputs and equipment. The situation underscores structural weaknesses in Brazil's chemical chain and the need for long-term policies that reduce dependence on imported naphtha, fertilizers and other strategic inputs, the group added. By Fred Fernandes and Isabela Mendes Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.
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