June 2026 | Market Update

Global Energy Disruptions Drive Resin Market Uncertainty

From Chuck Hoop, Business Director, Star Plastics

See what’s inside:

• Resin Pricing Trends: PC, ABS, Nylon, PBT & PP Markets
• Iran War Reshapes Global Petrochemical Outlook
• Strait of Hormuz Oil Shock Could Impact Markets for Years
• Asia’s Petrochemical Supply Chain Faces Major Disruptions
• Aluminum Shortages Pressure the Automotive Industry
• Job Market Shows Signs of Stabilization
• EPA Advances Chemical Recycling Policy Changes
• U.S. Employers Add Stronger-Than-Expected April Jobs
• Mutares Reports Progress on SABIC Engineering Plastics Acquisition
• New Home Sales Improve Amid Limited Existing Inventory
• Kevin Warsh Confirmed as New Federal Reserve Chair
• Market Outlook: Continued Volatility Across Energy, Resin & Supply Chains

Pricing for materials

Polycarbonate prices moved higher in North America and Western Europe but lower in Asia. North America reached $1.68/pound, up 10-15 CPP, mainly because benzene and other intermediate costs continued to rise, while supply remained ample and demand was stable. ABS prices also rose in North America and western Europe, while Asia remained weak. North America increased to $1.48/pound, up 3 to 5 CPP, with supply balanced and upstream cost pressure expected to ease as we move into summer.

Nylon pricing was mixed by region but generally reflected cost pressure in the West and weaker demand in Asia. In North America, nylon 6 rose to $1.70/pound, up 5 to 9 CPP, while nylon 6,6 rose to $1.90/pound, up 5-8 CPP.

PBT prices rose slightly in North America but softened in Asia and stayed range-bound in Europe. North America moved to $1.53/pound, up 3-7 CPP, although weak macro demand and low trade volumes are expected to limit further upside.

It seems the PP market is shifting from shortage and panic-buying conditions toward more normal, cautious buying. North America is beginning to see price relief after April highs. Buyers in most regions are cautious, well stocked, and resisting higher offers. In North America, PP homopolymer injection-grade was at $ 0.70-$0.75/pound in May versus nearly 80 CPP in April, while Mexico fell to the low 70’s CPP from the mid 70’s.

Overall, the plastics market showed a clear regional split: North America generally moved higher on feedstock and cost pressure, Asia moved lower on weak demand and softer feedstocks, and Western Europe saw selective increases but faces growing stabilization or downside risk as inventories rise and demand remains cautious.

Iran war will debilitate petrochemicals for the rest of 2026

From a recent issue of Chemical and Engineering News, the Iran war has completely changed the outlook for petrochemicals in 2026. What was supposed to be a year of oversupply and weak pricing has turned into a major global supply disruption, with oil, feedstocks, and finished chemical products trapped or delayed around the Persian Gulf. Roughly 20% of the global oil supply normally moves through the Strait of Hormuz, but March saw the market short by about 14 million barrels per day. Asia is feeling the worst of it because so much of its crude and feedstock supply comes from the region, and refiners there are already cutting output by 10%–15%.
For plastics and chemical buyers, this means higher costs, tighter availability, and longer supply chain headaches. Ethylene production has been hit hard, with outages tied to about 12% of global production, while polyethylene prices in Asia are reportedly up 40%–50%. North American producers are in a better spot because they rely more on domestic natural gas and can increase exports, especially PE going into Asia. But even if the war ends quickly, the recovery will not be quick. Products stuck in the Gulf, container imbalances, and feedstock shortages could take months or even quarters to unwind, so buyers should expect continued volatility in resin pricing, freight, and availability. Explore the full article.

 

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The oil supply shock will scar the world for years

In a late April article in oilprice.com, an industry leader in the oil and gas industry, wrote about the long-term effect of the Strait of Hormuz closure. The main takeaway from that article was the oil shock tied to the Strait of Hormuz is not expected to be a short-term disruption. According to the article, more than 10 million barrels per day of Middle East crude production has been shut in, and even if the Strait reopened today, it could still take months for exports and production to normalize. Some wells may restart quickly, but others could take several months because of damaged wells, clogged systems, labor constraints, maintenance needs, and the complexity of bringing production back online safely. The article also points out that most of the world’s spare oil capacity is in Saudi Arabia and the UAE, which means much of the “backup supply” is trapped behind the same chokepoint.

From a market standpoint, this means elevated oil prices, higher freight and fuel costs, and continued pressure across energy-linked supply chains are likely to stick around longer than many originally expected. For plastics, this matters because crude oil, liquified natural gas, transportation, additives, and global logistics all feed into resin costs. Even if the fighting slows or the Strait reopens, the recovery will likely be gradual, not immediate. Buyers should expect continued volatility, tightness in certain materials, and more supplier pricing actions as the market works through the lost supply and the slow restart of Middle East production. Take a closer look.

Asia’s petrochemical supply chain has collapsed, and textile and packaging factories have halted production en masse

In an article published in ChemNet, the disruption to textiles and packaging in Asia is highlighted. The energy disruption in the Middle East continues to ripple through the broader global economy, and Asia appears to be feeling the impact first. (This is normal for Asia to experience challenges first and North America second). What started as higher energy prices is now turning into real production issues, especially in petrochemicals, textiles, packaging, and other downstream industries. According to the Goldman Sachs report referenced, the shock is moving faster than expected, with companies facing higher raw material costs, margin pressure, production cuts, and softer demand all at the same time.

The biggest pressure points right now are monoethylene glycol (MEG) and purified terephthalic acid (PTA), which are key building blocks for PET resin and polyester fibers used in plastic bottles, food packaging, clothing, textiles, and many consumer goods. PTA prices have reportedly surged more than 30% since the start of the U.S.-Iran conflict. With China accounting for a significant portion of global PTA production capacity, even minor output reductions can quickly trigger volatility across worldwide markets. India is already beginning to feel the pressure, as textile manufacturers in Surat scale back production amid rising raw material costs and soft demand.

For packaging, this is another warning sign that cost pressure is likely to keep building. Higher PTA and other petrochemical feedstock costs will eventually work their way into food, beverage, and consumer goods packaging, which could add more inflation pressure. The larger concern is that this becomes a domino effect: Asia gets hit first, then the U.S. and North America. Even if the conflict cools off, the supply chain damage may take time to normalize, so buyers and processors should expect continued volatility, tight supply pockets, and more pricing pressure in the near term. Learn more.

An aluminum crisis is roiling the auto industry

In an early May article, the WSJ had an article on the automotive industry and shortage challenges with aluminum. Ford is feeling it more than most because the F-150 relies heavily on aluminum body panels. Dealer inventories are already tighter than normal, and the concern is that truck availability could become a bigger issue over the next 90 days, especially heading into the busy summer selling season. The shortage is being driven by a mix of issues: the Iran war disrupting Persian Gulf aluminum shipments, a 50% U.S. tariff, and a major outage at Novelis, (still recovering from the September 2025 fire, Ford’s key aluminum supplier). U.S. aluminum costs are now nearly 90% higher than a year ago, and Ford has doubled its expected commodity-cost hit for the year from $1 billion to $2 billion. While some steel producers think automakers may reconsider their use of aluminum, a broad shift back to steel does not look easy because the vehicles, tooling, and production systems were designed around aluminum. For plastics processors, this matters because higher vehicle costs, tighter truck supply, and pressure on automaker margins can ripple through the entire supply base. OEMs may look more closely at material substitutions, lightweighting alternatives, cost savings, and supplier concessions, which could create both pressure and opportunity for engineered plastics in applications that are under-the-hood, interior, and/or trim components.

Job market starts to show glimmers of good news

The job market is starting to show some encouraging signs after a long stretch of slower hiring and uncertainty for job seekers. ADP reported that private employers added 109,000 jobs in April, which was the strongest monthly gain in 15 months. On top of that, the Labor Department’s March data showed hiring picked up, giving economists some hope that the labor market may be gaining a little momentum again. Economists expect about 55,000 new jobs and unemployment to hold steady at 4.3% for May. While those job gains may seem modest compared to the post-pandemic boom, slower immigration means the economy does not need to add as many jobs as before to keep unemployment from rising.

There are still some caution signs. Much of the hiring strength is coming from healthcare, while other industries remain softer. Job openings have also been trending lower, and businesses are still being cautious because of trade policy changes, energy disruptions from the Iran war, and inflation pressure. Overall, though, this is a welcome shift in tone. The labor market is not booming, but it does appear to be stabilizing and showing signs of renewed life. For businesses and workers, that is good news. A steadier job market could help support consumer confidence, keep spending from falling too sharply, and give the Federal Reserve more breathing room as it continues to manage inflation. Get the full picture.

EPA advances chemical recycling rules backed by plastics industry

In sustainability news, Steve Toloken wrote an article on advanced recycling in Washington D.C. The EPA is signaling that it may open the door wider for chemical recycling, especially pyrolysis, by changing how it is regulated. Right now, pyrolysis-based recycling can be treated like solid waste incineration under the Clean Air Act, which brings tougher permitting and emissions requirements. EPA Administrator Lee Zeldin is pushing the idea that pyrolysis should be treated more like a manufacturing process instead, arguing that the current rules are outdated and are holding back investment in U.S.-based advanced recycling facilities. Industry groups like the American Chemistry Council and the Plastics Industry Association support the change, saying regulatory uncertainty is pushing investment overseas and slowing the development of domestic recycled feedstock supply.
Environmental groups are pushing back hard. They argue that pyrolysis can create many of the same pollution concerns as incineration, including hazardous air emissions, and they believe the EPA may be trying to move too quickly without a full, transparent rulemaking process. Their position is that keeping pyrolysis under incineration-style rules gives communities stronger protection, while the industry says those concerns can still be managed under other Clean Air Act sections. For plastics processors, this matters because it could eventually expand the supply of recycled or circular feedstocks in the U.S. If the EPA reclassifies pyrolysis as manufacturing instead of incineration, it may make it easier for companies to invest in advanced recycling capacity, which could mean more recycled-content options for compounds, packaging, durable goods, and engineered materials over time.

This is not an overnight fix. The debate is still tied up in regulation, public comments, emissions concerns, and likely legal challenges. We’ll keep you up to date as events warrant.

U.S. employers defy economic shock from Iran war and add a surprisingly strong 115,000 jobs in April

The April jobs report came in better than expected, showing the U.S. added 115,000 jobs despite the economic shock from the Iran war and the major disruption in global oil supplies. Hiring slowed from March, but it was still stronger than economists expected, and the unemployment rate stayed low at 4.3%. Healthcare, transportation and warehousing, retail, and construction helped carry the month, while manufacturing continued to struggle, cutting another 2,000 jobs in April and losing 66,000 jobs over the past year. Overall, the job market looks like it is holding up better than many feared. After a very weak 2025, hiring has improved in 2026, though it is still uneven. A big reason the unemployment rate is staying low is that fewer people are in the labor force, partly due to Baby Boomer retirements and tighter immigration policy. That means the economy does not need to create as many jobs each month to keep unemployment steady.

The big concern is still inflation. Gas prices have jumped because of the Strait of Hormuz disruption, and inflation is now running hotter again. Wages are still growing, but not fast enough to fully offset higher fuel, transportation, and everyday costs. So, while Americans are still working, many are feeling squeezed. For the Fed, this probably means no quick interest rate cuts, because hiring is stable enough and inflation is still too high. Take a closer look.

 

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Mutares reports improving conditions at Sabic engineering plastics business

In a mid May Plastics News article, Don Loepp reported that Mutares says the SABIC engineering thermoplastics business it plans to acquire is tracking as expected, with the deal still expected to close by the end of June. Internally, Mutares is calling the business “Jadeed,” and leadership sounded positive on the May 12 earnings call. They noted that higher oil prices are helping push sales prices higher, which is supporting the business even though feedstock costs are also moving up.

The business is meaningful to the plastics industry because it includes major engineering resins like polycarbonate, ABS, and PBT, with a large manufacturing footprint in North America. For plastics processors, this is another sign that resin pricing pressure is not easing quickly. The other key takeaway is that restructuring is still coming. Mutares made it clear that after the deal closes, there will be “heavy operational lifting” during the summer. That could mean changes in how the business is managed, how plants are run, how customer accounts are handled, and/or how product lines are prioritized. For processors buying PC, ABS, PBT, or related compounds, this is worth watching closely because transitions like this can create short-term uncertainty around supply, lead times, customer service, pricing, and product availability.

Overall, the message is that the business appears healthy enough heading into the close, supported by higher market pricing, but processors should stay close to their suppliers. With ownership changing, restructuring planned, and resin cost pressure still elevated, it would be smart for processors to review open orders, confirm supply positions, watch for updated pricing guidance, and make sure they have backup options where possible.

New home sales rise, supported by limited existing inventory

The National Association of Home Builders reported encouraging momentum in the U.S. housing market in March, highlighted by improved new home sales activity. Sales of newly built single-family homes rose 7.4% from February to an annualized pace of 682,000 units, which was also 3.3% higher than last year. A big reason new homes continue to see support is the limited supply of existing homes, which keeps some buyers looking toward new construction instead. Inventory remains elevated but is moving in the right direction. There were 481,000 new single-family homes available in March, slightly lower than February and down 4.6% from last year. At the current sales pace, that equals an 8.5-month supply, still above what is typically considered a ‘balanced market,’ but better than the 9.2 months reported a year ago. Pricing is also helping. The median new home price fell to $387,400, down 6.2% from last year and nearly 10% below the December 2025 peak. That cooling is giving buyers a little more breathing room, especially at the lower end of the market, where 20% of new homes were priced below $300,000. For the plastics market, this is a cautiously positive signal. The market is not fully back to normal because affordability is still a challenge and regional demand is uneven, but lower prices and tight existing home inventory are helping keep new construction moving. Article here (CNBC also had a mid-May article talking about the same statistics).

New Fed chair and how the press views the confirmation

First, on May 14, Kevin Warsh was confirmed by the Senate as the 17th chair of the Federal Reserve in a narrow 54–45 vote, showing just how political the Fed leadership fight has become. He was backed by all Republicans and only one Democrat, John Fetterman, while Kirsten Gillibrand did not vote. It was the tightest Fed chair confirmation since Senate approval became required in 1977. Dive deeper.

That said, we did some research on how the different news outlets reported and here is the synopsis of four underlying themes:

1. A very divided confirmation vote.
Reuters, AP, Bloomberg and WSJ have a tone that Warsh enters the job with less political consensus than prior Fed chairs, which could make the Fed’s next moves more closely scrutinized.

2. The big concern is Fed independence.
AP and Bloomberg emphasized that Warsh was President Trump’s pick at a time when Trump has been openly pushing for lower interest rates. Both framed the confirmation around concerns that the White House may try to exert more influence over the central bank. Warsh has said he will maintain Fed independence, but reporters are clearly watching whether policy decisions line up with political pressure.

3. Rate cuts may not be easy, despite Trump wanting them.
Reuters and Fortune report that markets are no longer assuming Warsh can quickly deliver rate cuts because inflation has reaccelerated. They also note investors are preparing for higher Treasury yields as Warsh inherits a Fed still battling inflation. Fortune’s takeaway is that Wall Street increasingly believes inflation may force Warsh to hold rates higher, or even consider hikes, despite political pressure for cuts.

4. Inflation is the immediate test.
AP and Reuters both point to persistent inflation above the Fed’s 2% target, rising energy costs, and broader price pressure as the backdrop for Warsh’s arrival. That puts him in a difficult spot: he has been associated with criticism of the Fed’s prior inflation handling, but now he owns the next phase of policy. Be careful what you ask for, you may just get it.

 

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