Entering 1Q 2026, markets are showing measured stability with selective areas of strength. Automotive dynamics continue to shift as U.S. production gains share and higher-income buyers support demand for premium vehicles. Industrial ordering patterns have normalized, though customers remain disciplined with inventory and purchasing behavior.
Across key resins, January pricing reflected modest feedstock-driven movement, while operating rates and global supply conditions continue to influence margin performance heading into the new year.
MARKET SPOTLIGHT
Mobility
As EV sales moderate, U.S.-built vehicles are gaining market share, supported by incentives and localization efforts. This shift may create expanded opportunities for North America–based material sourcing and production.1
Automakers are reducing model complexity to manage costs. Fewer trim variations and shared platforms can drive higher resin volumes as common materials are leveraged across multiple vehicle lines.1
The U.S. car buyer demographic continues to skew toward higher income. Households earning $200K+ represented 18% of buyers in 2020 and are projected to reach 29% in 2025, reinforcing demand for premium features and advanced materials despite broader economic pressures.2
E&E/Industrial
Demand has evened out as OEMs resumed more consistent ordering patterns, though most customer purchasing habits continued to be based on immediate order fulfillment needs (i.e., Just In Time inventory management). While order rates are up in 1Q 2026, order sizes appear to be smaller than average.3
Margins are flat-to-down (50-150 bps) vs. prior year averages in commodity resins, but up slightly for engineering thermoplastics (200-400 bps) vs. commodities.4
Approximately 1-3% volume increase vs. 4Q 2025, based on year-end inventory depletion goals at the end of last year and the need to bring in resin for new orders in the first portion of 2026. However, customer inventory levels are still below pre-2024 levels.5
PRODUCT NEWS
Polypropylene
PGP was up $0.02/lb. in January. CDI and CMA both reported out up $0.02/lb. as well.5, 6
CDI is estimating that PGP will be up $0.015/lb. in February and flat in March.5
ACC and CDI report operating rates at 70.5% and DOH at 36.8 days in December. Operating rates decreased by 6.9% and DOH decreased by 4.7 days from November.5, 7
Export: Activity in the export markets was reported as flat, after an increase of activity the last weeks of December.8
Mexico: Supply is reported as being adequate as producers in the U.S. continue to run their units with discipline to avoid margin erosion and as converters only buy what they need.8
Polyethylene
PE settled flat in January. CDI and CMA both reported up $0.05/lb. as well.5, 6
CDI is estimating PE to be flat in February and flat in March.5
Some suppliers have issued price increase letters of $0.05/lb. for February.
ACC and CDI report operating rates at 90.8% (varies by segment) and DOH at 40.5 for all of PE in December. Operating rates for all PE decreased by 4% and DOH increased by 6.9 days (all PE) from November.5, 7
Export: The first weeks of January saw an increase in activity, as potential price increases were anticipated.8
Mexico: Demand increased in the last weeks of December as buyers were trying to secure volumes before a potential price increase in January. The majority of sources agree that price increases will be coming in the next year. Braskem Idesa reported limitation in their production, specially in LDPE.8
ABS5
January ABS contract prices decrease.
U.S.-Taiwan trade agreement to reduce reciprocal tariffs from 20% to 15%.
Demand reported to be steady to slightly improved kicking off the new year.
SABIC announces sale of Europe and Americas ETP business. East Asia to U.S. West Coast freight rates see uptick entering January.
Polycarbonate5
PC January contract prices are lower.
PC domestic production is 7.5% lower YTD versus last year.
PC market is oversupplied globally.
Polystyrene
Final report on January polystyrene (PS) contract prices puts ICIS at up $0.01/lb. and CMA indices up $0.03/lb.5, 6
Indices report that feedstocks put slight upward pressure on pricing last month.5
February natural gas prices spiked 44% vs. January following below-normal temperatures for the majority of the U.S., putting upward pressure on energy costs for many petrochemicals.5
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