PE and PP contracts settled flat to slightly down in Q1 against a softening monomer cost base. Demand recovery from the 2024–2025 destocking cycle remains uneven across Germany, Italy and Iberia.
Q1 ethylene contract prices softened modestly through the quarter — €1,170/t in January, €1,165/t in February, €1,150/t in March — providing some cost relief that filtered through to PE pricing. The producer margin compression visible since mid-2024 continued, with European cracker operators running at the lower end of their historical profitability ranges.
LDPE film grade was the weakest of the polyethylene family. After a flat January settlement and a transient €10/t increase in February, March came in at -€15/t, leaving the quarter slightly negative on aggregate. Demand from agricultural and industrial film converters was soft, and the brief reopening of Middle East import arbitrage in early January capped any upward attempts before Cape-routing closed the window again.
LLDPE held flat across the quarter, with metallocene grades continuing to command a €60–90/t premium over Ziegler-Natta. Demand from stretch film and silage applications was steady through the spring agricultural cycle. HDPE blow grade was the strongest sub-segment at +€5/t cumulative, supported by dairy and water bottle pull. HDPE pipe weakened by €25/t as infrastructure project deferrals across Central and Eastern Europe pulled volumes back.
Buyer takeaway: PE buyers running short coverage entering Q1 were better positioned than those who locked in late-Q4 2025 at the peak. Q2 contract negotiations should reflect the softening monomer trend; metallocene LLDPE remains the only segment with no near-term price relief.
Propylene contracts settled at €1,130/t in January, drifting to €1,110/t by March. PP homopolymer fell €20/t cumulative across Q1, the weakest performance among the major polymers despite the cost base softening only marginally. The mismatch reflects genuinely weak end-demand rather than supply pressure.
PP impact copolymer for automotive applications was more resilient at -€10/t, but volumes were lower as European OEMs continued to manage the BEV-platform transition. PP random copolymer for clarified packaging held within €5/t of December levels — clear food container demand provided a floor.
Spot PP off-spec material was widely available at €100–150/t below contract through the quarter, with buyers absorbing volumes for non-critical applications (planters, dunnage, garden furniture). The Asian PP import arbitrage was closed for most of Q1 due to freight costs and Cape-routing, but began to reopen in late March as freight rates eased.
Suspension PVC was the weakest major polymer in absolute price terms, with December-to-March changes ranging from -€30/t (Northern Europe) to -€50/t (Southern Europe). The ECVM contract softened on weak EDC demand and continued residential construction stagnation in Germany, France, and the Benelux.
Pipe-grade PVC outperformed profile and sheet, holding flat across the quarter — water and gas distribution projects continue at municipal pace. Profile and window-frame grades fell hardest, mirroring -8% YoY residential construction starts. Cable-grade PVC was stable, supported by telecoms infrastructure and EV charging cable demand.
Import pressure was limited compared to PE and PP. PVC is less commodity-like in trade terms, with most European supply sourced regionally. The DG Trade anti-dumping investigation into US PVC imports continues; preliminary findings are expected in Q3 2026 and could tighten supply if duties are imposed.
Bottle-grade virgin PET ended Q1 down €10/t against December, with paraxylene and MEG cost movements largely neutral. The bigger story remains the divergence between virgin and recycled PET pricing — rPET commanded a €200–350/t premium over virgin through the quarter, depending on quality tier and geography.
The PPWR 25% recycled-content threshold for beverage bottles, which took effect in 2025, has absorbed roughly 1.2–1.5 Mt of rPET demand annually. Beverage majors (Coca-Cola HBC, Suntory, Danone) ran 30–50% rPET in Q1 portfolios, ahead of the regulatory floor. Mass-balance ISCC Plus volumes are growing but remain a fraction of what physical rPET supply can provide.
Sheet-grade APET was the weaker segment, dropping €15/t on competition from CPET (for ovenable trays) and PP (for fresh produce trays). Bottle-attached cap requirements under SUPD are now fully implemented across major SKUs and added no pricing pressure in Q1.
The aggregate European picture masks meaningful regional dispersion. Germany held flat to slightly soft, with manufacturing PMI in contraction territory and overall polymer demand running -3% YoY. The country's outsized exposure to automotive and industrial machinery sectors is dragging the average.
Italy was softer than the average. Packaging volumes held but white goods and automotive components weighed; regional discounts of €10–20/t to Northern European reference prices were common across PP and ABS. Iberia, by contrast, was the firmest regional market, with Spain holding €30–50/t premiums on infrastructure-driven PE and PVC pipe demand.
France saw PVC as the weakest spot, with packaging stable and automotive contract volumes holding (but down YoY). Benelux tracked the continental average without significant deviations. Eastern Europe — Poland, Czechia, Hungary — was the weakest demand picture, with deferred infrastructure CapEx and consumer goods softness pulling on PE pipe, PVC, and PP volumes.