February 2026 | Market Update

What’s Shaping Plastics, Markets, and Manufacturing Now

From Chuck Hoop, Business Director, Star Plastics

Check out what’s inside:

• Current pricing trends across key resins
• PC: Weak demand, import pressure, Sabic uncertainty
• ABS Imports dominate pricing and market dynamicNylon 6 and 66: Balanced supply with automotive-driven demand
• Stable demand in well-supplied PBT market
• Producer Price Increase Announcements
• Sabic Plastics Divestitures
• Wall St. says continued gains expected, risks increasing in 2026
• Mortgage rates stabilize near six percent
• Investor confidence pushes stocks higher
• Automaker exits U.S. EV market
• Semiconductor firm TSMC expansion boosts domestic manufacturing
• Security concerns over China logistics exposure
• Mexico tariffs favor USMCA suppliers
• Lower U.S. tariffs support Taiwan semiconductor investment
• Regional housing prices diverge
• Higher tariffs on South Korea could impact resin supply

On the resin pricing front

Resin	Grade	Price	Trend
PC	GP	$1.56	Flat
	Optical	$1.46	Flat
ABS	GP	$1.46	Flat
	Extrusion	$1.50	Flat
Nylon 6		$1.50	Flat
Nylon 66		$1.70	Flat
PBT	GP	$1.45	Flat

Polycarbonate (PC) in North America is being shaped by sluggish demand and available supply and export outlets weakening as the opportunity to export has become slightly unfavorable. Imports, especially from Taiwan and China, remain a meaningful pressure point. Even with raw-material increases, January general-purpose PC pricing was assessed flat versus December at about 156 ¢/lb, (A relative number, not an absolute) reflecting the market’s limited ability to push through increases in the current demand environment. A notable strategic variable is Sabic’s announced divestiture of its engineering thermoplastics business (including PC) to Mutares, which includes significant US PC capacity, adding some uncertainty to future competitive behavior and supply discipline. (see the article below re: Sabic)

ABS pricing continues to be influenced by global competition and the spread between domestic contracts and imported spot material. The report shows a domestic delivered general-purpose ABS range around 141–151 ¢/lb, while spot-import GP is indicated far lower at roughly 80–83 ¢/lb. On the cost side, ABS cash costs edged up about 1¢/lb in January on higher styrene, though costs remain below prior-year levels. The expected themes for the region include ongoing import pressure and uncertainty tied to the Sabic ABS asset divestiture to Mutares, which could alter capacity utilization and market strategy and potentially create openings for importers if discipline weakens.

Nylon 6 and Nylon 66 markets in North America are described as well supplied, while demand improves incrementally. January production costs were reported flat at roughly 82¢/lb for Nylon 6 and 92¢/lb for Nylon 66, with expectations for costs to dip in the following month. Demand sensitivity remains highest in automotive—particularly for Nylon 6,6, where more than 60% of North American nylon 66 goes into automotive applications—so the pace of auto production and any tariff-related disruptions are key near-term swing factors. Pricing was estimated at about 150¢/lb for nylon 6 and 170¢/lb for nylon 66, (again, relative numbers, not absolutes) which is consistent with the theme of supply being available and demand a bit sluggish.

PBT in North America is characterized by stable to healthy demand in North America, and with robust supply and an overall long market balance, even as global oversupply persists. Prices were unchanged versus December, with a representative level around 145 ¢/lb and a noted range of about 140–150 ¢/lb. (Relative, not absolute) Costs moved modestly higher in January (about +1¢/lb to ~98 ¢/lb) and are forecast to ease slightly this month. End-market support continues to come from automotive and electrical/electronics, with the report emphasizing steady demand conditions in North America despite broader global capacity and trade dynamics.

On January 16, American Styrenics announced a 3 CPP increase for implementation on February. See the announcement letter here.

Celanese has announced a 12 CPP increase. for nylon 6 and 9 CPP for 66 for February. In my opinion, and seeing the market, they are trying to stop the slide. It’s still good to be able to provide your customers with the information and let them determine validity.

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BIG NEWS – Sabic sells plastics units in Americas, Europe

Plastics News reported in early January that Sabic is selling off two chunks of its plastics business to two different German investment firms as part of a bigger “portfolio cleanup” strategy. One deal is for its engineering thermoplastics (ETP) business in the Americas and Europe—think PC, PBT, and ABS compounding—being sold to Mutares for $450M. An earn-out (a pricing structure in mergers and acquisitions in which the sellers must “earn” part of the purchase price based on the performance of the business following the acquisition). This could pay Sabic more if theETP business throws off strong free cash flow over the next four years or if Mutares eventually sells it. This ETP footprint includes multiple plants across the U.S., Mexico, Brazil, Spain, and the Netherlands, and it traces back to the old GE Plastics assets Sabic bought in 2007. While it does not include Noryl, Ultem or the LNP business units. The second deal is Sabic’s European petrochemicals business going to Aequita for $500M, covering olefins/polyolefins and related compounds (ethylene, propylene, PP, HDPE/LDPE/LLDPE) across several sites in the U.K., Netherlands, Germany, and Belgium. Aequita is pitching this as a “build a bigger platform” move because they already bought some European resin plants from LyondellBasell in 2025 and think they can create synergies and operational improvements. Sabic’s leadership is framing both sales as part of a portfolio optimization program that started in 2022, meant to focus the company on areas where they believe they have durable advantages and to boost long-term value.

The main risks of this kind of activity are that transitions like this can get messy fast as customers may worry about continuity, pricing, or product quality. They may start qualifying alternative suppliers, especially if they think service levels could dip during ownership change. Do you think Sabic service could get any worse? For Sabic, the risk is strategic and financial: once these assets are gone. Any multi-site manufacturing handoff comes with regulatory, EHS, and supply-chain risks—permits, compliance culture, and supplier contracts all need to transfer cleanly, or you can end up with downtime, shortages, or unexpected costs. We’ll be following this one very closely as Sabic is such a significant producer in the market. Full story here. And read the Sabic press release here. (Sabic further optimizes its portfolio for long haul).

Wall Street Expects the Market to Keep Rallying in 2026 Despite Lofty Valuations
In early January, the Wall Street Journal (WSJ) wrote that tthe market will continue to rally into 2026 despite some headwinds. The summary is Wall Street’s vibe heading into 2026 is basically: rates should come down; earnings should stay strong. So yeah, stocks can probably grind higher again — but it’s going to be tight. After three straight big years (2023–2025), the market is rolling into year four with prices already stretched, and the economy feels less clear-cut than it did during the 2025 run. Strategists at big banks are still calling for gains — just smaller, more “meh” gains than what investors got used to recently.

What makes people optimistic?

• Lower interest rates could help as the Fed is signaling at least one cut this year, and traders think more cuts are possible. Cheaper money tends to support stock valuations.
• Earnings are expected to be strong with analysts looking for roughly 15% profit growth for S&P 500 companies this year, which would be a standout pace.
• The economy has been weirdly resilient even with tariffs, sticky inflation, and other headwind. Consumers kept spending and companies kept investing — especially in AI/data center infrastructure.
• Potential policy talks of tax cuts is another “could be nice” factor for markets.

What could trip it up?

• Valuations are strong as the S&P 500 is trading around 22x forward earnings vs. a ~19x 10-year average — meaning investors are already paying more for good news.
• The rally is long – A fourth straight up year would be rare historically, and long streaks tend to raise the odds of a choppier stretch.
• Optimism can be a warning sign, when everyone expects a decent year, it doesn’t take much disappointment to cause a reset.
• AI stocks have carried a lot of the market’s gains, and the worry is that returns may not match the massive spending.

In the near-term a “tell” could be that investors are about to get fresh reality checks from the December jobs report, and early earnings season, starting with big banks (JPMorgan, Wells Fargo, Citi, etc.). Bottom line: 2026 could still be positive — just probably not another “easy double-digit party.” It would be more likely to have a year when stocks can inch up if rates fall and earnings deliver, but the margin for error is a lot thinner than it’s been.

Mortgage Rates in 2026
Given housing is a significant market for plastics, we have seen articles where the expectations are to have slightly reduced rates in 2026. We went to key indicators of the housing market and interest rates and here is what was seen:

Right now, the “starting point” starting in 2026 is about 6.15% for a 30-year fixed and ~5.44% for a 15-year fixed based on Freddie Mac’s most recent weekly release (week ending Dec 31, 2025). From there, most forecasts are basically saying: don’t expect some big snap-back to the 3–4% era—more like a slow, bumpy drift sideways or a little lower. The mortgage-backed securities (MBS) have the 30-year averaging about 6.4% in 2026 as reported by the WSJ, Fannie Mae’s outlook points toward something closer to ~5.9% by the end of 2026, and a Reuters poll of experts’ lands around 6.18% on average in 2026 (with ~5.88% in 2027). Even the broader “housing outlook” chatter from groups like the National Association of Realtors tends to frame 2026 as roughly 6% depending on the quarter, with modest improvement in affordability. The practical takeaway is: it’s reasonable to plan on ~6.0%–6.5% for a conventional 30-year fixed through 2026, with the odds slightly favoring a gentle move lower—unless inflation heats back up.

Recalling that the Federal Reserve changes in short term interest rates do not tie directly to mortgage rates. As covered in previous Monthly Market Updates, the mortgage rate is more closely related to the 10-year Treasury yield and Mortgage Back Securities (MBS)..

Investors See Bright Side in Economic Outlook, Push Stocks to New Highs
It’s great to see good news when looking at the economy – on January 8th, the WSJ reported that stocks kicked off 2026 on a pretty upbeat note, with investors feeling better about the economy and pushing the S&P 500 and Dow to new record highs in the first full week of the year. Even a softer-than-expected December jobs report didn’t really shake confidence, since growth still looks solid and early readings show consumer sentiment higher. Economists like Comerica’s Bill Adams think the outlook is brighter because policy is getting more supportive, with easier monetary conditions plus fiscal tailwinds like tax cuts and higher government spending. For the week, the S&P climbed 1.6%, the Dow rose 2.3%, and the Nasdaq gained 1.9%, while small caps really led the way—the Russell 2000 jumped 4.6%—suggesting the “rotation trade” is alive and well as people trim mega-cap tech exposure amid AI-bubble worries and spread into other parts of the market. Investors seemed to brush off the geopolitical tension after a U.S. incursion in Venezuela, and some pointed to history showing the market’s first five trading days in January often line up with how the rest of the year goes. Still, there’s a bit of uncertainty around a pending Supreme Court decision on Trump’s tariffs, with a potential ruling as soon as next week: striking them down could spark a relief rally by helping margins and consumers, but it could also remove a revenue stream, widen the deficit, and push bond yields higher. While Freddie Mac dipped and Fannie Mae rose after Trump said the two would buy $200 billion in mortgage bonds to try to make homeownership more affordable. Find out more.

Stellantis cancels entire plug-in hybrid platform
Multiple reputable outlets report that Stellantis plans to stop selling its current U.S. plug-in hybrid (PHEV) models beginning with the 2026 model year, attributing the move largely to weaker-than-expected demand and a shift in its electrification approach. Reuters specifically identifies the affected U.S. PHEVs as the Jeep Wrangler 4xe, Jeep Grand Cherokee 4xe, and the Chrysler Pacifica plug-in hybrid, and frames the change as ending these existing PHEV offerings for 2026.

Auto coverage often summarizes this as Stellantis “canceling its plug-in hybrid lineup” (or “traditional PHEVs”) because those 4xe/Pacifica programs represented the core of its mainstream North American PHEV strategy, even as reporting notes Stellantis is simultaneously emphasizing other electrified paths such as conventional (non-plug-in) hybrids and range-extended electrified vehicles rather than continuing with the current PHEV setup. The “segment leader” phrasing commonly refers to the Wrangler 4xe’s strong standing in U.S. PHEV sales in recent years, which is why I believe the decision is frequently described as notable and surprising.

TSMC Expanding in Arizona
Taiwan Semiconductor Manufacturing Company, TSMC, the biggest maker of cutting-edge AI chips, is looking at a major expansion in Arizona that’s tied to a potential U.S.–Taiwan trade deal, according to people near the talks. The idea is that the U.S. would ease current tariffs on Taiwanese goods (currently at 20% as of January 13, 2026), and Taiwan would boost spending and investment in the U.S. by more than $300 billion. That big number reportedly includes and builds on the $165 billion TSMC already outlined previously.

TSMC already opened one fab near Phoenix in late 2024, and the new plan would add several more facilities—potentially bringing its Arizona presence to around a dozen plants. The additional sites would focus on “logic” chips (the core processors used for AI and advanced computing that companies like Nvidia and AMD rely on), plus two factories for advanced packaging, which supports and enhances how those chips perform. A recent land purchase supports the idea of this is getting real: TSMC reportedly paid about $197 million at auction for roughly 900 acres next to its existing Arizona footprint.

All of this is happening at the same time, and the U.S. government’s broader push to pull more high-tech manufacturing back onshore, using a mix of tariff strategy and incentives. TSMC’s Arizona buildout has also been supported by billions in subsidies tied to the 2022 CHIPS and Science Act. At the same time, the story sits in a bigger geopolitical context—TSMC is deeply tied to Taiwan’s economy and security posture, and concerns like regional conflict risk, land constraints, and power availability have nudged it to spread production to places like the U.S., Japan, Germany, and beyond. Meanwhile, the U.S. is still trying to rebuild a truly domestic advanced chip capability, with Intel improving but not yet at the level of the top AI chip manufacturing companies like TSMC.

Why does this matter to the plastics industry? Semiconductor manufacturing in the U.S. means a bigger, steadier demand base for high-performance polymers used all over chipmaking facilities and tools—think ultra-pure piping and fittings, chemical-handling components, filtration housings, wafer carriers, cleanroom infrastructure, and ESD-safe parts. New manufacturing will also pull a huge amount of construction into the region, which can tighten supply and shift pricing for specialty resins (PVDF/ETFE/PTFE, PEEK, PPS, high-temp nylons, PC blends, flame-retardant materials, etc.), while raising the bar on traceability, contamination control, and consistent quality.

Dragon in the Cab: How China Quietly Embedded Itself in American Trucking
In January 2008, the American Trucking Associations hosted a delegation from the China Road Transport Association to study how U.S. trucking evolved into a modern national logistics system. The visitors met with ATA leadership and major carriers to discuss operations, safety rules, driver training, tax structures, and environmental regulations. A parallel discussion emphasized cooperation in a growing global economy, with ATA’s president underscoring that freight transportation and infrastructure are central to national prosperity.

Seventeen years later, this article argues that “cooperation” now looks like strategic exposure. It points to mounting U.S. national-security concern over China’s footprint in logistics—Chinese-linked ocean shipping and terminals, Chinese-manufactured port cranes, and logistics data platforms that could create visibility into sensitive shipments—alongside a parallel debate over Chinese land purchases near military sites. Against that backdrop, it highlights gaps in commercial driver vetting and the complexity of subcontracted trucking networks, asking why the U.S. can blacklist firms and debate farmland restrictions while still lacking a systematic way to ensure the people and companies physically hauling defense freight—including subcontractors and owner-operators—aren’t tied to entities the Pentagon identifies as linked to China’s military. Explore the details.

Mexico’s Tariff Overhaul Creates Opportunities for U.S. Plastics
A recent article in Plastics Today, reviewed how Mexico just revamped its tariff setup in a way that’s likely to shake up the U.S. plastics industry’s biggest export market, and it’s a classic mix of upside and headaches. The Plastics Industry Association’s chief economist, Perc Pineda, says the U.S.–Mexico plastics trade has stayed surprisingly steady over the last decade, with Mexico taking about 26% of total U.S. plastics exports in 2024 and the U.S. posting another healthy surplus—$11.6B total, made up of $7.92B in resins, $3.2B in plastic products, plus $239.2M in machinery and $282.5M in molds. The big change hits January 1, 2026, when Mexico’s new tariff regime raises duties (as high as 35%) on imports from countries that don’t have free trade agreements (FTA) with Mexico, across more than 1,400 product categories—including a meaningful slice of plastics. In the plastics bucket, 79 product categories are flagged in Mexico’s tariff schedule, with many jumping to 25% and a handful to 35%. Those specific product categories represent $18.7B in Mexico’s total imports, and U.S. exports into Mexico for them were $10.8B in 2024. Because the U.S. is already Mexico’s main supplier (57.6% of Mexico’s imports for those affected plastic products), the higher cost penalty on non-FTA sources—especially China—sets up a real trade-diversion opportunity where buyers shift volumes toward USMCA partners due to price and availability. The catch is that Mexico will still assess tariffs based on country of origin and “substantial transformation,” so U.S. companies shipping from offshore operations in non-FTA countries could get clipped by the higher duty rates unless supply chains and rules-of-origin compliance are tightened up to keep USMCA benefits intact. The message is, basically, there’s a window here, but you have to move smart and document everything right.

For molders in the United States, this can translate into more RFQs and better quoting leverage as Mexican customers look to replace higher-tariff imported components with United States Mexico Canada Agreement (USMCA)-qualified supply. It can also reward molders who can prove origin, streamline cross-border logistics, and pivot tooling and resin sourcing quickly turning compliance into a competitive advantage instead of a paperwork burden. Full story here.

U.S. lowers tariffs to Taiwan from 20% to 15% with no duties
The Taipei Times confirmed that there has been a reduction in tariffs coming from Taiwan to the United States. The U.S. and Taiwan just wrapped up trade talks in Washington where the US agreed to cut tariffs on Taiwanese goods from 20% to 15%, and (importantly) apply that 15% rate without stacking it on top of existing most-favored-nation (MFN) duties. The deal also gives Taiwanese semiconductors and related products the most favorable treatment under Section 232, plus similar favorable treatment when Taiwanese chip firms bring raw materials, equipment, and components into the US for their operations. On top of that, both sides are talking up deeper cooperation on supply chains and AI, and Taiwan’s government says major Taiwanese players in chips, electronics manufacturing services, AI, and energy would invest around $250B in the U.S., with another up-to-$250B in credit guarantees to help finance US investments (no firm timeline was shared). There’s also chatter (reported by the New York Times) that TSMC could add at least five more US plants, and TSMC leadership said they’re accelerating U.S. capacity expansion to meet customer demand.

Why is this good for the United States? it pushes more semiconductor and advanced manufacturing investment onto U.S. soil, which can mean more high-paying jobs, more local supplier ecosystems, and less exposure to overseas disruptions for critical tech. It also helps U.S. companies that depend on Taiwanese chips by reducing policy uncertainty and smoothing the flow of equipment and inputs into U.S.-based production. And by setting a more predictable, “in-family” trade framework with a key partner, the U.S. strengthens supply chain resilience and national security in one of the most strategically important industries right now. Get the full perspective.

Which U.S. Markets are seeing increases or declines in housing costs
The National Association of Home Builders recently published a segment on which local markets are seeing increases, and those that are seeing decreases in housing pricing and the results may be surprising. Even though home prices are way up nationally since COVID (about 55% higher from early 2020 to Q3 2025), the local picture is getting a lot more mixed. Many metro areas hit record highs in Q3 2025, but more than half of markets have already slipped at least a little from their recent peak. Most of those pullbacks started in late 2024 or early 2025, and they range from basically flat (down 0.1%) to pretty noticeable (down as much as 12.7%). The bigger “corrections” called out are Punta Gorda, FL (down 12.7% from its Q4 2022 peak), Austin, TX (down 11.3% from its Q2 2022 peak), and Victoria, TX (down 11% over the last three quarters after peaking in Q4 2024). Meanwhile, a lot of the Midwest and Northeast are holding up better—still growing, just more slowly—because there isn’t much inventory and demand is hanging in there. Examples are York–Hanover, Pa. (+6% YoY in Q3 2025), Worcester, Mass. (+4.4% YoY in Q3 2025), Wausau, Wis. (+9.5% YoY), and Milwaukee–Waukesha, Wis. (cooling from a 16.7% growth peak in Q2 2022 to a steadier +5.6% YoY in Q3 2025). Find out more.

Trump increases South Korea tariffs, slamming legislature for not approving U.S. deal
On the January 26, The Hill reported that the Trump administration announced incremental tariffs on South Korea products coming into the United States. President Trump said that he is raising U.S. tariffs on South Korea, arguing the country’s legislature has failed to approve a trade agreement he says he and President Lee reached on July 30, 2025, and reaffirmed during his October 29, 2025, visit to Korea. In a Truth Social post, Trump criticized the Korean Legislature for not enacting the deal and announced he is increasing South Korean tariffs—covering autos, lumber, pharmaceuticals, and other “reciprocal” categories—from 15% to 25%. He also pointed to earlier claims that South Korean leaders agreed to buy large quantities of U.S. oil and gas and that South Korean companies pledged $600 billion in investment in exchange for lower tariffs. Review the details..

In the resins market, this will affect supply and pricing from LG Chemical, Lotte, Samyang, Kumho, Korean Petrochemical Ind. Co. (KPIC), Kolon Hyundai Chemical, Hyosung and others. It will affect ABS, PCABS, nylon 6 and 66, PP, PE, PVC, PS, PET, acetal, and PMMA,

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