🛢️ Oil price behavior
In recent months; the price of oil has fallen significantly; despite tensions in the Middle East. This is due to a combination of factors: increased supply (especially from non-OPEC+ producers); a slowdown in global demand and a proportional reaction by financial markets to geopolitical risk. This situation has put sustained downward pressure on crude oil prices.
📉 Evolution of plastic resin prices
Decline until the beginning of the year
- End of 2024 and beginning of 2025: notable declines were observed in resins such as PE; PP and PET; driven by excess supply; decreased demand and lower petrochemical input costs (plasticosycaucho.com; icis.com).
- In Asia; corporate PET prices also fell and showed modest fluctuations; in line with the drop in PTA and MEG costs (es.wkaiglobal.com).
Partial recovery and tensions
- January to March 2025: breaks in the downward trend due to production disruptions; extreme weather conditions and supply constraints (ambienteplastico.com)
- April-May 2025: mixed signals; some resins show flat or moderate increases; while others continue to decline due to tariff uncertainty and weak demand (ptonline.com).
Current situation: June 2025
- In North America; resin prices continue to fall; influenced by oversupply; weak demand and an uncertain tariff environment (ambienteplastico.com).
🔍 Comparison: oil vs plastics
Summary of dynamics
- The fall in oil prices slowed down the costs of petrochemical inputs; causing sharp declines in plastic resin prices (ambienteplastico.com).
- Lagging demand and excess supply led to overstocking in the resin markets; putting further pressure on prices .
- Specific events (weather; disruptions; tariffs) led to temporary price corrections; although without reversing the overall trend.
💡 Conclusions and recommendations for companies
- The extremely high correlation with oil prices (up to 90% correlation) makes plastic resins sensitive to crude oil cycles.
- Oversized global supply; especially in Asia and the Middle East; prolongs downward pressure.
- Structural factors (tariff disputes; climate; logistics) have an intermittent impact; but do not change the main trend.
💼 Strategic reflection
This scenario requires CEOs and CFOs to act with agility and vision. Reviewing supply contracts; renegotiating conditions with clauses linked to oil indices; and diversifying resin sources are essential measures. Likewise; having specialised external advice; such as that offered by ERA Group; allows you to:
- Correctly interpret signals from the petrochemical market.
- Design hedging strategies.
- Implement cost and logistics efficiency models.
In an environment where price rises and falls are sudden and frequent; expert support not only protects margins; but also provides the speed to seize opportunities and mitigate risks.
