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<p>What supply shocks mean for polyolefins strategy</p>

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US PE export prices approach pre-Iran war levels

Houston, 26 June (Argus) — US polyethylene (PE) export prices fell sharply for the 10th consecutive week to 26 June, taking prices for most grades almost back to pre-Iran war levels, as producers offered end-of-quarter sales to help clear out inventories. Export prices fell by between 4.5¢/lb and 11.5¢/lb on an fas Houston basis, depending upon grade, for the week ended 26 June. Prices were in some cases in a wide range, with not all producers offering at the lowest levels. "Producers have found some large traders to help them clear inventories," said one US PE trader. "Not all manufacturers are participating." Prices started declining at the end of April, when the global market was pressured by low-priced resin from China and weak global demand. With this week's decline, prices are near, or in the case of high density polyethylene (HDPE) high molecular weight film, actually lower than on 27 February, before the US war with Iran began. HDPE high molecular weight film prices were assessed at 39¢/lb on 26 June, 4.5¢/lb lower than levels on 27 February. Other grades, such as HDPE blow molding, HDPE injection and linear low density polyethylene (LLDPE) butene are between 3.5¢/lb-6.5¢/lb higher than levels on 27 February. Low density polyethylene (LDPE) prices are declining also, but have held a premium to other grades, with prices still 11¢/lb higher than pre-war levels. Last week, traders said some of the lowest prices were limited to sales in China. But this week, traders said there are no restrictions on where the product can be sold, as long as it is outside of the North American market. "There are no restrictions. The producers are asking us to take more," said another US PE trader. "They are feeling some pressure." The pressure has come from a number of factors, including: low prices out of China which pressured the global market lower, high producer inventories in the US and Canada, weak global demand, and concerns about volumes that will come out of the Middle East once the strait of Hormuz fully opens. Once producers work down their inventories, some sources said it is possible that prices could rebound slightly. However, one trader said a significant price increase is not likely, because then the material sold this week at low prices could end up being re-exported back to the US. "If they raise prices above 50¢/lb again, all of these tonnes sold will make a round trip and come back," said the trader. By Michelle Klump Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Petcore conference highlights challenges for trays

Petcore conference highlights challenges for trays

London, 26 June (Argus) — The prospect of bans on packaging that is not recycled at scale mean the PET tray recycling industry is in a race against time to boost capacity, but it may also be discouraging investors from a potentially shrinking market. Participants at last week's Petcore Europe Thermoforms Conference in Valencia, Spain, expressed mixed views, with optimism about potential developments tempered by the need to keep abreast of a host of fast-changing variables, including recycler closures, virgin prices and legislative changes. Presenters highlighted the adverse effects of the Iran war on the recycling sector and the extra pressure it has brought to bear on the tray-to-tray market. Rising costs, shrinking industrial margins and declining plastics demand are creating strain and hindering development of the tray-to-tray segment this year. Participants also drew attention to Europe's trade deficit with the rest of the world. As Europe consumes more goods not manufactured locally, recyclers face increased risk from imports taking market share from cost-saving end-use applications such as thermoforming, where certification requirements are often less stringent than in the bottle-to-bottle market. This dynamic is adding further pressure to the market. Delegates heard that Europe cannot compete on cost of collection and recycling, raising concerns that the European circularity market could collapse under these pressures, leaving no local outlet for European waste at scale. In addition to the broader challenges facing recycling, the tray market faces its own specific economic hurdles. Jose-Antonio Alarcon, technical manager of the Petcore thermoforming working group, explained that tray recyclers face a steeper cost curve because PET trays are structurally more complex to process than bottles. While higher virgin material costs are currently supporting the entire recycled PET market, any optimism from a slight pick-up in demand is offset by recyclers' frustration at their inability to counter the effects of rising feedstock and production costs on margins. While upcoming legislation offers some support for the industry's outlook, participants emphasised that unresolved issues with the new rules are limiting progress. Guidelines are often delayed and vague, and economic institutions lack visibility and clarity. The absence of harmonised and simplified legislation is a significant challenge, affecting the investment landscape. Devil in the legislative detail Details of the EU's proposed Packaging and Packaging Waste Regulation (PPWR) were discussed at the event. Under Annex V, Article 25, single-use plastic fresh-produce packaging weighing less than 1.5 kg — such as strawberry punnets, mushroom trays, and tomato clamshells — will be banned from January 2030. From 2030, all packaging must be recyclable and will be graded on a performance scale, at A, B and C. Packaging with a recyclability rate below 70pc will not be considered recyclable and may face restrictions. All contact-sensitive PET packaging must also contain a minimum of 30pc recycled content. There is concern the tray-to-tray industry is underprepared for these changes, which presenters stressed are less than four years away. Businesses will require more certification, and significant progress in the tray market is needed to meet recyclability and recycled content targets. The main concerns are the Annex V tray ban and the recyclability target. The legislation aims to reduce unnecessary packaging and, according to presenters, is currently targeting tray packaging with holes — something that is expected to have a significant impact on PET tray usage and tray-to-tray demand. Further clarity on guidelines from the European Commission is expected in February 2027. Participants expressed concern that thermoforms could be grouped with non-circular plastic categories, given current collection and recycling rates. They also highlighted the problem of increased food waste resulting from reduced tray packaging for perishable products such as fruit and vegetables. The consensus at the event was that tray collection must improve. Spanish market developments In Spain, delegates heard that PET trays currently account for 20–38pc of PET bale composition. The SDDR (mandatory deposit return system) is planned for November 2026 but is expected to be delayed, with retailers requesting a postponement. Current estimates suggest that yellow bin collections could contain up to 50pc PET trays when the DRS is fully operational because the proportion of bottles is likely to decrease. Tray recyclers are keen to capture tray material more effectively through improved sorting. The Amorebieta, Biscay, pilot programme is working on additional separation of trays and is expected to be scaled up and rolled out across the country to at least 97 plants, gradually developing the market, although progress is slow. Ecoembes told delegates that the pilot programme yielded 160 tonnes of bottles and 110 tonnes of PET trays in the last monthly tender. The next phase of the project is to expand to Catalonia sorting plants by 2028. Recyclers fear investment gap Participants agreed that tray-to-tray sorting and recycling capacity must improve. However, a lack of regulatory clarity and the prospect of a ban are impacting investment. This concern was echoed by Alarcon in an interview with Argus before the event. There was discussion about the possibility of an exemption for trays from the PPWR ban or restrictions but further clarity on the scope and details of any restrictions or requirements is needed quickly to ensure economic confidence for investment. The latest understanding presented at the conference was that sealed trays are out of scope for restrictions, but unsealed trays with holes are at risk and awaiting further detail from the European Food Safety Authority (EFSA). Another meeting is scheduled for July with the European Commission cabinet. Overall, participants remained hopeful for the future development of the tray industry, but against a challenging market backdrop, optimism was limited. Participants are pushing for stronger advocacy, faster regularity clarity, less legislative complexity and an alignment of rules with operational realities. There is concern that the industry is poised to expand but may run out of time as potential PPWR restrictions approach, while participants continue to face significant market headwinds. Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

Michelin restructures US tire manufacturing footprint

Michelin restructures US tire manufacturing footprint

Houston, 26 June (Argus) — Michelin North America will restructure its US manufacturing operations, with plans to consolidate production between two tire plants. The company informed stakeholders on 25 June that it will close its passenger car and light truck tire plant in Tuscaloosa, Alabama, starting in early 2027 and concluding by year-end 2028. Operations at the site have been temporarily idled until 29 June, as details are communicated to employees. Tire production and rubber-mixing at Tuscaloosa will be phased out over the next two years. About 1,200 workers at the site will be affected, with union leaders set to begin discussions on severance packages. At the same time, Michelin aims to shift nearly all production from its BFGoodrich Tires brand line to its Fort Wayne, Indiana, passenger car and light truck tire plant. "Due to the size, footprint and infrastructure of the Fort Wayne factory, the site is better positioned to consolidate the capacity and meet future demands for the success of BFGoodrich Tires," said Terry Redmile, senior vice president for manufacturing operations in the Americas. The move targets structural inefficiencies, particularly underutilization, that have weighed on the long-term sustainability of Michelin's North American manufacturing operations. The company added that its core recreation/off-the-road tire portfolio continues to faces competitive pressures despite maintaining market share and performance benchmarks. Michelin operates 34 industrial plants across the US and Canada, with production tailored to a wide range of tire segments, such as passenger vehicles, light and heavy trucks and specialty applications for aviation, agriculture and earthmoving equipment, according to a company fact sheet. By Joshua Himelfarb Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

India restores industrial LPG supply as imports rise

India restores industrial LPG supply as imports rise

New Delhi, 26 June (Argus) — The Indian government has restored LPG supplies to industrial and commercial consumers to pre-war levels, supported by rising imports this month, according to a government notification issued late on 25 June. New Delhi has also directed refiners to limit the diversion of propane and butane streams to LPG production and use them instead as petrochemical feedstock, reversing its earlier mandate to prioritise LPG output, the notification added. The shift in policy has come on the back of India's rising LPG imports from the US, Kpler data show. India is set to receive its highest volume of US LPG this month at 1.09mn t, making up 60pc of overall LPG imports, predictive volumes from Kpler show. The US volumes include both term and spot cargoes booked by Indian importers over the last two months. Supplies from Middle East also increased in June and currently total at 617,000t, up from 381,000t in May, but lower from 1.69mn t in February before the war started, Kpler data show. Shipments from the UAE are set to hit 224,000t in June — the second highest supplier after the US. The UAE has been using shuttle vessels to move LPG from Adnoc's Ruwais terminal to Sohar in Oman, where it gets transferred to larger gas carriers. India-bound Very Large Gas Carrier (VLGC), NV Sunshine, is carrying over 44,000t of LPG for state-run Indian Oil (IOC) for delivery at Dahej on 28 June, after conducting a ship-to-ship transfer on 16 June at Sohar in Oman, Vortexa and Kpler data show. Most of India's LPG imports from the Middle East are undergoing ship-to-ship transfers near Sohar in Oman or the Gulf of Kutch near India, the data show. Industrial demand Typically, India's industrial LPG demand stands at 2.9mn t/yr, accounting for 9pc of the country's total LPG demand across sectors including hospitality, food services, agriculture, manufacturing, pharmaceuticals, healthcare and education. In May, industrial LPG consumption was at 195,100t, down by 12.6pc on the year, but up by 4pc on the month, as supplies were restored to some extent, Indian oil ministry data show. Bulk LPG supplies — delivered by tanker truck and stored on-site in large pressure vessels — to manufacturing, processing and refining users have been restored to 50pc of pre-war levels, the notification said. India's annualised bulk LPG demand stands at 1.1mn t, or 3pc of overall LPG demand. Bulk LPG supplies totalled 10,800t in May, down by 83pc on the year and 9pc on the month, oil ministry data show. New Delhi has also said the increased allocation of propane and butane streams for non-LPG uses will proceed without affecting domestic LPG availability, while keeping aggregate indigenous LPG production at no less than 40,000t/d. Domestic LPG production had reached 52,000 t/d in May up from 50,000 t/d in April, a government official told reporters in New Delhi. Support for petrochemicals The new order will help raise output of key petrochemicals, including polypropylene (PP). Supplies of packaging material have remained tight, prompting Indian buyers to source from exporters in China and southeast Asia. About 80pc of India's PP output was hit by feedstock curbs, Argus estimates show. Normalised feedstock supplies will allow several petrochemical plants, such as Mangalore Refinery and Petrochemicals (MRPL), to restart PP units. But an Indian producer said it would still take some time for domestic supplies to reach pre-war levels. The easing of restrictions could also prompt the Indian government to reinstate import duties on petrochemicals, as prices in other parts of Asia have receded, a Mumbai-based trader said. In April, New Delhi waived customs duties on 40 petrochemical products, including polyethylene (PE), polyvinyl chloride (PVC) and PP, to offset extra costs for domestic industries. PP buying in the industrial belts of Morbi and Rajkot in Gujarat have slowed as an immediate impact, another Indian producer said. Argus assessed PP raffia prices at $1,180-1,270/t cfr India for the week to 19 June, down from $1,350-1,430/t cfr India on 10 April. Argus assessed linear low-density polyethylene (LLDPE) prices at $1,210-1,270/t cfr India for the week to 5 June, compared with $1,430-1,500/t cfr India on 10 April. By Rituparna Ghosh and Sourasis Bose Send comments and request more information at feedback@argusmedia.com Copyright © 2026. Argus Media group . All rights reserved.

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