April 2026 | Market Update
Markets Shift Fast as Pressures Build
From Chuck Hoop, Business Director, Star Plastics
Check out what’s inside:
- Pricing Trends
- Capacity & Supply Chain Developments
- Petrochemical Executives Plan for Uncertainty
- The EV Market Continues to Experience Challenges
- EV Market Hits Another Snag
- Housing Market Overview
- Shipping Disruptions Drive Cost and Complexity
- How the Iran War Adds Uncertainty to Housing
- Federal Reserve Holds Interest Rates
- Resin Prices Surge Amid Supply Chain Disruption
- AI Chip Expansion Signals Manufacturing Shift
- Polyolefin Market Faces Prolonged Tightness
- Sabic Shutdown – Correction from Last Month’s MMU
Pricing – Strap yourself in for this ride
Price increases are hitting the market fast, and in many cases, they are effective as early as the same day the letter goes out but no later than two weeks. That is how quickly conditions are changing right now. We have already seen at least 40 price increase letters from different suppliers, plus multiple duplicate notices from the same companies, which tells us this is not isolated noise but a broad market move that is building momentum. Polycarbonate is rising from 15 to 23 cents per pound across the board from both domestic suppliers and importers. ABS is climbing even faster, with increases running roughly 20 to 27 cents per pound. Nylon 6 is up 15 cents per pound or more, while nylon 66 is nearing 20 cent increases. Imported PBT, which remains a key source of supply for North America, is moving up more than 18 cents per pound and getting close to 20. Olefins like polypropylene and polyethylene are already above 25 cents per pound and are closing in on 30 cents quickly. HIPS has seen increases in the 20 to 25 cent range, while PVC and CPVC are moving up around 7 to 10 cents per pound.
And that is only part of the story. Freight is becoming another major pressure point, with surcharges showing up in all forms, from percentage-based adders to cents-per-pound fees, to flat charges of $300 or more per shipment regardless of size. In some cases, suppliers are shifting to ex works terms and putting the freight burden directly on the customer. On top of that, many import suppliers in the Asia-Pacific region still cannot quote pricing or confirm delivery at all, and a number have already declared force majeure. That situation is still developing, which means the risk is not just higher prices but also lack of availability. The message to the market is pretty clear: if there are critical needs, now is the time to review orders, secure supply, and make buying decisions quickly before costs move even higher or material potentially becomes unavailable.
Petrochemical executives plan for uncertainty
Big picture: the major petrochemical companies are saying the Middle East conflict is making an already tight market even tighter. Dow, LyondellBasell, and Eastman all pointed to supply uncertainty, rising feedstock and oil-related costs, and a stronger case for price increases across polyethylene, polypropylene, and related materials. Dow’s message was, basically, that supply is shaky, inventories are low, and they’re pushing through price hikes fast. Jim Fitterling, chairman and CEO of Dow, said a huge share of polyethylene supply is either offline, constrained, or affected by the conflict. He also noted that inventories are historically low, demand could improve after Lunar New Year, and higher oil prices may actually help Dow because of its feedstock position. Dow is running assets hard and leaning on its geographic spread and feedstock flexibility.
LyondellBasell said the same pressure is showing up in pricing. PE and PP prices are up, oxyfuels are benefiting from crude-linked pricing, and North America looks especially advantaged because of feedstock economics. Their view is that inventories are still well below normal, which gives producers more room to push price increases. They also warned that disruption in the Strait of Hormuz could keep Middle East material constrained, and even if the conflict eases, normalization could still take months.
Eastman sounded the most like “we’ve seen this before.” The company says it has a playbook for high oil-price environments and is focused on passing through higher costs where possible. Since most of its assets are domestic, it sees itself in a relatively strong position. Eastman also expects specialty and advanced materials pricing actions to keep moving, including more increases around April.
What does this mean for material processors? Expect higher resin costs, more volatility, and the possibility of spot supply getting tighter before it gets better. Producers are clearly preparing customers for continued increases, not a quick reset. Get ahead of purchasing instead of waiting for monthly price letters. If you know you’ll need PE, PP, or related inputs, it may make sense to secure volume early rather than chase supply later in a rising market. Review your inventory strategy – this is probably not the moment to run too lean on critical materials. You do not need to overbuy everything, but core grades with long lead times or single-source risk deserve a buffer. Talk to suppliers now about allocation risk, lead times, and regional sourcing options. Revisit customer pricing. If your raw material costs are exposed, make sure your own quotes, surcharges, or contract language can keep up. The petrochemical producers are already signaling cost pass-through behavior. Overall, the producers are signaling that this is not just a headline issue — it is feeding directly into pricing, availability, and planning. For processors, the smart move is to stay close to suppliers, build some flexibility into inventory and sourcing, and prepare customers for a more expensive and less predictable spring. Learn more
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The EV Market continues to experience challenges
One industry that seems to be struggling is the EV sector. Government-subsidized rebates have tapered off, and as regulations for conventional vehicles loosen, we’re starting to see the impact. In a recent issue of Manufacturing Drive – SK Battery America is making a pretty major cut at its Commerce, Georgia battery plant, laying off 958 workers and bringing the site’s headcount down from 2,566 to about 1,600. The company said the affected employees were notified and will still receive pay and benefits for the next 60 days, even though Friday, March 6, was their last day on the job. SK says it is still committed to Georgia and the broader U.S. battery supply chain, but the move reflects a tougher market as EV battery demand has cooled and federal incentives have faded. Like a lot of companies in the EV space, SK is now also looking at other growth areas, including battery energy storage systems tied to things like backup power and data center demand.
A big part of the pressure seems tied to shifts by automakers, especially Ford, which has pulled back on some of its EV plans, moved more toward hybrids and smaller EVs, and is putting more focus on energy storage. Ford also dissolved its BlueOval SK joint venture with SK On, a battery subsidiary of SK Group, and canceled the electric F-150 Lightning after weak sales, which adds to the backdrop here. The story also notes that SK had been in growth mode not long ago, expanding the Georgia workforce in 2023 when EV demand looked stronger. Now the company is facing scrutiny from a law firm investigating whether the layoffs violated WARN Act notice rules, although SK says its actions comply with the law. Get the full story.
EV Market Hits Another Snag
In a mid-March edition of the Automotive News, an article reported – Honda is pulling back hard on its EV plans, becoming the latest automaker to rethink earlier expectations as U.S. demand stays softer than many forecast. The company said it is canceling development and launch of the 0 Series SUV, 0 Series Saloon, and Acura RSX, while also expecting a loss of nearly $16 billion tied to these moves. The Honda Prologue also appears to be ending after its current production run wraps up in December. Honda now joins GM, Ford, and Stellantis, which have also announced major EV-related write-downs in recent months, pushing the combined total close to $70 billion. The broader takeaway is that the EV market is not disappearing, but it is clearly slowing and resetting, with launches being delayed, canceled, or scaled back across the industry.
For the plastics industry, this matters because EVs have been an important growth engine for higher-value engineered plastics used in battery systems, charging components, power electronics, lightweight structural parts, connectors, and interior applications. A slower EV rollout could soften near-term demand for materials like flame-retardant PC/ABS, nylon, PBT, and other specialty compounds tied to electrification platforms. At the same time, it may shift more focus back toward hybrid vehicles, internal combustion platforms, and cost reduction across all vehicle programs, which could increase pressure on resin pricing, material substitution, and supplier margins. In practical terms, plastics suppliers may see longer qualification cycles, delayed program launches, and more caution from OEMs, but the need for lightweighting, electrical performance, and heat management materials is still there, just moving at a slower pace than expected. Get more insights.
Tariff Refunds are a Hot Topic Now
We’ve seen several interpretations of how the tariff ruling will be implemented. The trade court is now moving from the Supreme Court’s ruling that wiped out the International Emergency Economic Powers Act (IEEPA) tariffs to the harder part—how to actually get the money back to importers. Judge Richard Eaton ordered Customs and Border Protection (CBP) to start recalculating entries without those invalidated tariffs and to issue refunds, and he made clear that the benefit should extend broadly to importers, not just the companies that filed suit. Reuters and AP both report that CBP told the court it is building an automated refund system and says it could be ready in about 45 days, with refunds including interest. The clear caveat: this doesn’t mean checks are going out right away. The court is still working through the mechanics, and there has already been additional motion practice after the judges’ initial order. Reporting and legal summaries indicate the administration is challenging the scope and speed of the refund process, while CBP says the volume is enormous—more than 330,000 importers and roughly $166 billion in affected duties. In other words, the direction of travel is clearly toward refunds, but the timing and exact process are still being hammered out.
For importers, this is important because it improves the odds that they will not need to fight case-by-case for every entry. Legal analysts say the current framework points to three buckets: unliquidated entries should be liquidated without the IEEPA tariffs; recently liquidated but non-final entries should be reliquidated without them; and older liquidated entries may still require protests or other procedural steps depending on their status. That means companies should still coordinate closely with customs counsel and brokers instead of assuming the system will automatically catch every historical entry.
For the plastics industry, this could have a very real impact on cash flow. Importers of resins, additives, compounds, finished molded parts, electronics housings, and capital equipment that paid those invalidated tariffs may eventually recover meaningful dollars, which could ease margin pressure and reduce the need for tariff-driven surcharges. But it does not erase the broader trade-risk picture, because the Supreme Court ruling only knocked out tariffs imposed under IEEPA; tariffs imposed under other authorities like Section 232 (Trade Expansion Act) or Section 301 (Trade Act of 1974) still stand unless separately changed or overturned. So, for plastics processors and compounders, this is a refund opportunity and a near-term balance-sheet positive, not a full reset of U.S. tariff exposure. View details.
Housing Market Overview
We did a review of the housing market in mid-March using sources such as realtor.com, National Association of Home Builders (NAHB), National Association of Realtors (NAR), AP News, and others.
Currently, the U.S. housing market looks like a soft-demand, slowly-improving-supply market, but the picture is different for existing homes versus new homes. Demand is still being held back by affordability, even though mortgage rates have improved from a year ago. Freddie Mac’s average 30-year fixed rate was ~6.0% in early March 2026, down from nearly 7% a year earlier, which has helped a bit, but not enough to fully unlock buyer demand.
For existing homes, demand is still weak. NAR data show January 2026 existing-home sales fell to a 3.91 million annual rate, down 8.4% from December and 4.4% from a year earlier. Pending sales, which are a forward-looking signal, were also down 0.8% month over month and 0.4% year over year in January. That says buyers are still cautious, even with slightly better financing conditions.
Inventory for existing homes is improving, but it is still not what most people would call robust. NAR reported 1.22 million existing homes for sale in January, equal to a 3.7-month supply. That is a little better than late 2025 and better than a year ago, but still below what is usually considered a balanced market. Homes are also taking longer to sell, with median days on market rising to 46 days in January.
The broader resale-listings market confirms that supply is rising, though unevenly by region. Realtor.com reported active listings in February were up 7.9% year over year, the 28th straight month of annual gains, but inventory was still 16.8% below typical 2017–2019 levels nationally. New listings were up 2.4% year over year in February, and pending listings rose 4.2%, suggesting spring activity is starting to pick up a bit, especially where rates have eased and weather disruptions are fading. The South and West are much closer to pre-pandemic inventory levels, while the Northeast and Midwest remain much tighter.
For new homes, the market is a little different. Builders generally have more inventory than the resale market. Census and HUD reported December 2025 new-home sales at a 745,000 annual rate, with 472,000 new homes for sale, equal to a 7.6-month supply. That is much more supply than the existing-home market, and it means builders are still one of the main places buyers can actually find options.
That said, demand for new homes is not especially strong either. NAHB’s February 2026 Housing Market Index showed builder confidence at 36, which is below the neutral 50 mark. Buyer traffic was especially weak at 22, and 65% of builders were still using sales incentives, while 36% were cutting prices, with an average reduction of 6%. So builders have inventory, but they are still having to work to move it.
So the clean takeaway is this: existing homes remain undersupplied, but demand is still sluggish because affordability continues to be tight. New homes have relatively better supply, but demand is also cautious and builders are using incentives to keep sales moving. In other words, the market is not frozen, but it is not strong either. Inventory is improving from the extreme shortage period, especially in the South and West, yet nationally the U.S. is still dealing with a structural housing shortage that Realtor.com recently estimated at just over 4 million homes.
This is from a consolidation of multiple sources.
Iran war leads largest shipping line to terminate Mideast Gulf voyages, levy $800 charge
Freightwaves reported that Mediterranean Shipping Company (MSC) is effectively stopping direct service into the Arabian Gulf because of the Iran war and the near-shutdown of traffic through the Strait of Hormuz. It issued an “End of Voyage” declaration on March 3, meaning cargo already booked for Gulf ports, whether still on land or already at sea, will instead be discharged at the next safe port rather than delivered into the Gulf. For shippers, that means higher cost and more disruption. MSC is adding an $800 per container surcharge to cover the diversion, and customers are also responsible for local discharge, handling, storage, and pickup costs at the safe port. Any cargo that still needs to move onward will have to be rebooked separately through MSC. In practical terms, this adds delay, cost, and complexity for any supply chain relying on imports or exports through Gulf ports. For plastics and petrochemicals, this matters because the Gulf is a major export hub for resin, chemicals, and feedstocks. Disruptions like this can delay shipments of PE, PP, PET intermediates, and other petrochemical-related materials, while also raising freight and logistics costs across the supply chain.
How the Iran War Adds Uncertainty to the Housing Outlook
In mid-March, the NAHB published an article on the Iran war and how the housing market could be affected. Builder sentiment ticked up a bit in March, mainly because mortgage rates eased some, and gave the market a little breathing room. Confidence for newly built single-family homes rose slightly, and builders are feeling somewhat better about future sales, too. That said, the mood is still pretty cautious. Long-term rates have started creeping back up as the Iran war keeps pressure on oil prices, which could eventually feed back into inflation and borrowing costs.
The labor market is also adding to the uncertainty. Job growth has been soft, unemployment moved higher, and both manufacturing and construction have been losing jobs. Residential construction has been especially weak over the past year. One positive is that wages are still growing faster than inflation, which helps consumers, and layoffs have not gotten out of hand. On the housing side, single-family starts and permits have been sluggish, although custom homes and townhouses have held up better than built-for-rent activity. Looking ahead, a change in policy could make a difference, with some proposals aimed at boosting housing supply and reducing mortgage barriers, but other parts of pending legislation could actually slow rental home construction. Take a closer look.
Federal Reserve Holds the Interest Rate
A CNBC publication on March 18 reported that the Fed is basically stuck in wait-and-see mode right now. With the Iran war adding fresh uncertainty, oil prices moving higher, inflation risks still hanging around, and the labor market sending mixed signals, the market expects the Fed to leave rates unchanged at 3.50% to 3.75%. Most investors now do not see a cut happening until at least the fall, and even then, probably only one cut this year. The real focus is not the decision itself, but what Powell says about inflation, growth, and whether the Fed is more concerned about a slowing economy or inflation remaining too sticky. The Fed’s own recent materials show the current target range at 3.5% to 3.75%, and the January press conference also confirmed policymakers were holding steady at that level.
For the plastics industry, this matters in a few important ways. First, higher oil and feedstock volatility puts direct pressure on resin, additive, and freight costs. Recent chemical market reporting shows the Middle East conflict is already driving sharp increases in crude, naphtha, olefins, methanol, and polymers, along with logistics disruptions and higher freight costs. That raises the risk of resin price increases, longer lead times, and tighter availability, especially for materials tied more closely to global oil-based feedstocks. Second, if the Fed keeps rates higher for longer, interest-sensitive end markets like housing, durable goods, appliances, and some consumer products could stay softer, which would weigh on plastics demand even as raw-material costs rise. In other words, processors and compounders could get squeezed from both sides: weaker demand in some end markets, but higher input and transportation costs.
There is a slight offset for North American producers. The Independent Chemical Information System (ICIS) noted that U.S. chemical producers may gain a short-term competitive advantage versus regions more exposed to oil- and naphtha-based feedstocks, though that benefit could be limited if higher energy costs start destroying downstream demand. For plastics, the near-term takeaway is: expect ongoing pricing volatility, more cautious customer buying behavior, pressure on margins, and continued emphasis on supply-chain flexibility, raw-material positioning, and passing through costs where possible. Article here.
Resin prices surge as Iran conflict disrupts supply chains
In a late March article in Plastics News and PolymerPoints Live, Frank Espisito summarized that the resin market is getting hit hard right now, and buyers are preparing for some pretty steep price increases in April. February already saw prices move up on a lot of major materials, and since the Iran conflict started on February 28, things have gotten even tighter. The big issue is not so much plants going offline, but supply chain
bottlenecks, shipping disruption, and rising feedstock costs that are pushing prices higher across almost every resin family.
Suppliers are now coming out with aggressive increase letters on polyethylene, polypropylene, polystyrene, PET, PVC, and engineering resins like nylon, polycarbonate, and ABS. On top of that, processors are starting to pre-buy material to get ahead of more increases, which only adds more pressure to supply. Industry leaders at Dow, LyondellBasell, and Eastman are basically saying the same thing: inventories are low, logistics are messy. North America is in a better position than other regions because of feedstock advantages, and they’re all moving quickly to push through higher pricing.
Musk was building advanced chip manufacturing supporting Tesla and SpaceX
Manufacturing Drive reported in late March that ElonMusk is basically saying the world just doesn’t make nearly enough AI chips for what he wants to do next. He said current global AI chip output is only a tiny fraction of what his companies would need for things like humanoid robots, self-driving cars, reusable rockets, and even AI data centers in space. Because suppliers like Samsung, TSMC, and Micron can only expand so fast, he says Tesla, SpaceX, and xAI are going to start building their own massive chip facility in Austin called “Terafab.” Reuters reports the project is meant to bring chip design, manufacturing, testing, packaging, and mask-making together in one place so they can improve chips much faster.
The idea is for Terafab to support both Earth-based and space-based AI. About 20% of its output would go toward Tesla uses like Full Self-Driving and Optimus, while the rest would support space applications tied to Musk’s bigger orbital AI ambitions. That lines up with SpaceX’s FCC filing for a huge solar-powered orbital data center network, though that proposal is still just a filing and would depend on major technical and launch progress. Meanwhile, other U.S. chip capacity is also growing, including TSMC in Arizona, but Musk’s point is that outside suppliers still won’t scale fast enough for his plans.
War-driven disruptions point to prolonged polyolefin price hikes in 2026
In a recent article in Plastic News, following the Executive Forum in Clearwater Florida, Don Loepp had a conversation with Estaban Sagel, Principal, Chemical and Polymer Market Consultants. Sagel’s message was basically that this isn’t a quick bump in the road for polyolefins — it looks more like the start of a longer supply disruption that could keep PE and PP prices higher well into 2026. He compared it to the Middle East getting hit by repeated hurricanes, where the real issue is not just temporary outages but ongoing damage to energy, export, and shipping infrastructure. That matters because the region normally sends huge volumes of polyethylene and polypropylene into Asia and Europe, and even if the conflict calms down, it will still take time to repair facilities, free up shipping, and get supply chains moving normally again.
He also said this shift gives North American producers a real edge, since they mostly run on lower-cost ethane instead of oil-based naphtha, making them more competitive when global supply is tight. On the flip side, converters are in a tougher spot because they are dealing with higher resin prices while still competing against imported finished goods made with globally priced resin. Sagel’s advice was to stay grounded in real market data instead of relying too heavily on contract indexes, build more supply flexibility, and keep watching trade policy, since tariffs and USMCA changes could create even more disruption. One possible bright spot is recycling, because higher virgin resin prices could make recycled PE and PP more competitive. Overall, his view was pretty clear: the market has shifted from oversupply to tighter conditions, and companies should be ready for more volatility and firmer pricing ahead. Article here.
Sabic Shutdown – Correction from Last Month’s MMU
Last month we listed the Sabic shut down dates in error for the Burkeville, Alabama facility. This is one of the two most significant PC plants, the other being Mount Vernon, Indiana. The official shutdown of the Burkeville site started on March 23, 2026 and is scheduled to last four weeks. Historically, their ability to come up on plan is less than stellar.