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Polyethylene Prices to Surge by Up to 100% amid Multiple Hikes by Dow Chemical
Release time:
Apr 27,2026
Reports indicate that shipping disruptions in the Strait of Hormuz have disrupted the global petrochemical industrial chain, triggering a sharp rally in naphtha prices, a core raw material for plastics. U.S. plastic packaging suppliers are facing mounting cost pressures and have successively passed on higher costs to downstream buyers. Global chemical giant Dow Chemical warned that Middle East conflicts have impacted approximately 50% of the world’s ethylene and polyethylene production capacity, with supply-demand imbalances driving a drastic price surge.
Supply-Demand Imbalance Fuels Price Hike Wave, Poising Polyethylene Prices to Double
Dow Chemical announced polyethylene price increases in April, raising prices by 30 US cents per pound, representing a roughly 60% hike. An additional 20 US cents per pound increase is scheduled for May, bringing the total growth rate to 100%. Jim Fitterling, CEO of Dow, stated bluntly that the magnitude of this round of price hikes is unprecedented in more than a decade.
As a critical chokepoint in the global petrochemical supply chain, the Strait of Hormuz handles around 40% of naphtha shipments to Europe, America and Asia. Shipping disruptions have directly tightened raw material supply and pushed up naphtha prices. Cost pressures have spread across the industrial chain, leading to a notable rise in production costs for U.S. plastic packaging suppliers and heavy burdens on downstream clients.
Q1 Financial Results: Revenue Decline & Net Loss, Cash Flow Stands Out
On April 23, Dow Chemical released its 2026 first-quarter financial report, with robust cash flow serving as the core stabilizer amid weak overall performance. Financial data showed the company posted net sales of 9.794 billion US dollars (approximately 66.942 billion yuan), a 6% year-on-year decline. It recorded a net loss of 445 million US dollars (around 3.04 billion yuan), while operating EBIT reached 154 million US dollars, a year-on-year decrease of 76 million US dollars, mainly dragged down by falling product prices.
Cash flow delivered a strong performance: cash generated from continuing operations hit 1.1 billion US dollars, a year-on-year surge of 1 billion US dollars, primarily attributed to compensation received from a legal lawsuit against NOVA Chemicals.
Diverged Business Performance: High-Growth High-Performance Materials & Coatings
The three major business segments showed distinct performance divergence. Packaging & Specialty Plastics, as well as Industrial Intermediates & Infrastructure, posted declines in both revenue and profits, while the Performance Materials & Coatings segment achieved robust growth against the trend.
- Packaging & Specialty Plastics: Net sales reached 4.9 billion US dollars, down 7% year on year; EBIT totaled 208 million US dollars, a year-on-year drop of 134 million US dollars. The segment was pressured by lower polyethylene prices, reduced licensing income and increased scheduled maintenance activities, partially offset by rising sales of flexible packaging products.
- Industrial Intermediates & Infrastructure: Net sales stood at 2.6 billion US dollars, down 8% year on year; operating EBIT rose by 10 million US dollars year on year, narrowing overall losses. Sales of polyurethane and construction chemicals declined due to price drops, facility shutdowns and Middle East conflicts. Higher sales in industrial solutions were offset by falling prices and lower licensing revenue.
- Performance Materials & Coatings: Net sales held steady year on year at 2.1 billion US dollars; operating EBIT jumped 139% year on year to 117 million US dollars, a rise of 68 million US dollars. Boosted by favorable exchange rates and growing silicone sales, strong market demand in electronics, home furnishings and personal care sectors offset the negative impact of partial price declines.
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Guangzhou Zhenghao New Material Technology Co., Ltd. is a production and processing enterprise led by the production and research and development of water-based lotion environmental protection additives. The company is located in Huachuang Industrial Park, Xiancun Town, Zengcheng District, Guangzhou, as a new enterprise supported by the state.
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