Are restrictions in refined products from Russia causing spot C2 and C3 prices to come under pressure?

The record petrol & diesel retail prices in the UK are a consequence of constrained supply of refined products from Russia. The resulting shortfall has meant that European crude oil refiners are enjoying enhanced margins, with demand outstripping supply and petrol & diesel prices inflating more rapidly than crude oil prices.

The strong economics of refining in Europe has the consequence of high refinery operating rates, not only when producing transport fuels, but also for bi-products used in other petrochemicals. Whilst much of the additional Naphtha output will substitute missing Russian origin production, the petroleum refining operation involves the use of FCCs (Fluidized Catalytic Crackers) from which C3 (propylene) is a significant output. This goes some way to explain the rollover for C2 (ethylene) contract prices and the reduction in C3 contract prices.

Monomer Price Movement
Change (Contract)
C2 (Ethylene)
C3 (Propylene)
SM (Styrene Monomer)
Brent Crude

The following graph also depicts the opening up of the C3 versus C2 spot to contract delta.

C2 & C3 Index

PE and in particular PP producers are faced with the challenge of balancing increased feedstock availability at discounted prices with a polymer market that appears to be trending towards surplus. The immediate consequence is some softening in PE and PP prices, although producers will be working hard to restore a more favourable balance in the market.

Whilst Europe does not quite have the same ‘motoring season’ that affects transport fuel demand in the US, demand for fuel does still tend to increase in the summer months. At a time when polymer demand normally falls as converters shut down for seasonal holidays, this may lead to further downward pressure. The coming few months are likely to be interesting.

In the case of Styrenic Polymers and Engineering polymers, increases in crude oil, energy, benzene and to a lesser extent SM (styrene monomer) costs will put prices under further inflationary pressure.

Mike Boswell
Managing Director – Plastribution Group

Oil Prices

Exchange Rates

UK Economic Data







Real GDP (Q on Q)

Q1 2022


UK Output

Manufacturing Index

Q1 2022



New Car Registrations (Y on Y)




Retail Sales (Y on Y)




Unemployment Rate




CPI (Y on Y)




RPI (Y on Y)



Interest Rates

Bank of England Base Rate




Prices in June dropped with some reasonable decreases, despite monomers staying relatively flat.

With weak downstream user demand, propylene (C3) dropped by €10 / MT and ethylene (C2) rolled over. However, with poor demand for all polyolefins, most producers and traders offered reductions to stimulate demand and move stocks. As imports into Europe start to return (though logistics issues remain), local producers are under increasing pressure to compete. Polypropylene probably saw the biggest falls with prices now back to where they were before the Ukraine invasion. Polyethylene is not far behind, but prices are dropping slightly slower on some PE grades as uncertainty on some imports remain.

Demand continues to be weak, but it is hoped that these price decreases will encourage a return to “normal” levels of stock-holding, rather than the “hand to mouth” purchases that we have seen with recent high prices. However, significant economic headwinds are affecting the UK economy, with a recorded contraction of 0.3% in April.

Whilst June order intake is stronger, we are likely to be in an oversupply situation for a few months as supply from outside Europe is slowly recovering. Shipping from USA to Europe is now relatively low cost, but congestion at US ports remains, as do general issues in getting goods to ports. We have seen spikes in supply with nothing for months and then large quantities arriving. COVID outbreaks in China are still happening and have the potential to still upset fragile supply chains.

Prices are likely to slip further, but with the delta from contract monomers to polymers back in the €200 / MT range, producers will be looking at losses, particularly with continued high energy costs. There is already talk in the industry of supply being restricted and planned maintenances brought forward. We should see a plateau reached soon either through demand picking up or supply being restricted.

Ian Chisnall
Product Manager – Polyolefins

Polyolefins Feedstocks
£/Metric Tonne by month



LDPE pricing dropped in early June by approx. £70-100 / MT as material was readily available and sellers fought for market share.

Pricing is now around £1,525-1,600 / MT for most grades though higher prices are being reported. LDPE pricing may slip further in July but is probably not far from the bottom of the pricing cycle.



LLDPE pricing dropped by approx. £50-80 / MT, but prices are being reported in a wide range as delivery date is unclear on many offers. Prompt delivery is still £1,525 / MT and above but deals for just under £1,500 / MT are now being offered with a later delivery date. Premium for C6 hexene grades has dropped as availability has improved.

Metallocene grades also continue to see improved availability and prices reflect the greater choice. LLDPE is likely to soften further in July and is likely to see more price pressure from imports.



HDPE has dropped £50-100 / MT depending on the grade with film grades dropping the most on low demand and plentiful supply.

Blow moulding and Injection grades were seen as more balanced with better demand and prices have held up better. As with LLDPE, July is likely to see more price softening with more imports expected but at some point, the pricing will have to reflect high production costs.



PP dropped in June with Homopolymer in particular dropping significantly as the market has been oversupplied.

Drops of £200 / MT were heard for the higher priced suppliers looking to become competitive again. Homopolymer is now in the range of £1,400-£1,490 / MT, though some European suppliers are holding off on big reductions citing the continued high production costs.

Copolymer dropped by less but still under a lot of pressure with buyers having multiple options. £1,550 / MT was reported but pricing just over £1,600 / MT appeared to be more indicative.

PP downstream demand in automotive etc. remains uncertain and is likely to add further pressure on pricing in July, but European producers will be reluctant to keep selling at a loss.

Other Polyolefins

Even with continued restricted availability, EVA saw reductions for the first time in a while. Though prices are still significantly above other PE grades, EVA was not immune from the drop in demand and prices have been adjusted by approx. €100 / MT

Speciality PP is still restricted but also saw some slight softening on pricing.


Andrew Waterfield
Product Supervisor – Styrenics

Styrenics Feedstocks
£/Metric Tonne by month



May SM rose by a further €84/T, still driven by surging energy prices and concerns about natural gas supply.

Production of SM is very energy intensive compared to other monomers, and this causes Styrene to be extremely reactive to any changes in energy cost.

SM supplies also remained low as EU supply tightened and US imports fell to almost nothing.  Due to this, Polystyrene production was low and logistics issues did nothing to help the situation.  However, PS availability was good, bolstered by the fact that PS demand from converters was low as rumours of a price decrease in June appeared. Only essential material was purchased at these record prices.

June SM contract price settled at €16/T higher than May –  now an all-time high. These increases are still driven by spiralling energy costs and concerns surrounding gas supply in Europe.

PS in general rolled over. Supply will remain tight as producers attempt to avoid overproduction, while converters will be forced to choose between security of supply and record pricing.




Despite rising composite monomer costs (SM +€84/T, Butadiene Roll, ACN +€14.5/T) ABS prices remained level in May. Supply was normal with no major outages, but demand was restrained as a slowdown was seen across all sectors.

June Monomers only show a slight change (SM +€16/T, Butadiene +€16/T, ACN -€90/T).  This, coupled with slow demand, points to a likely rollover.  Supply should remain normal.



As usual, PC/ABS price is following the trend of ABS.

Other Styrenics

SAN and specialities such as ASA and SMMA continue to follow the price trend of ABS.

Engineering Polymers

Sharron Jarvis
Product Supervisor – Engineering Polymers

Engineering Polymer Feedstocks
£/Metric Tonne by month



Wide spread price increases announced once again between 100-300 euros per metric tonne.

Raw materials, energy costs and transportation are still rising. The situation for supply on standard grades is sufficient, however there continues to be restricted supply of more speciality grades.



Varying price increases announced to the market of between 200-600 euros per metric tonne.

Supply from Europe still very restricted and there is little in the way of imports from the US. The ongoing situation in Ukraine also continues to affect energy costs, transportation, and intermediates for PA66 materials.



The picture for POM remains unchanged with increasing prices. The supply situation remains extremely restricted with allocation systems still in place.



Benzene contracts saw a significant increase of 219 euros per metric tonne for June. The price announcements are varied with Asia announcing some decreases in price due to lack of demand; however, in Europe where production remains low with reduced outputs due to maintenance programs, we are seeing three-digit increases.

Supply should be adequate as we start to see more imports arriving from Asia and a weaker demand in Europe.



Price increases announced to the market of around €200/tonne, and the supply of MMA is still noticeably short.



The situation remains unchanged. Continued shortages of Purified Terephthalic Acid (PTA) and Butanediol (BDO) means significantly higher prices and extremely restricted supply.

Other Engineering Polymers

The situation for other engineering grades remains complex, difficult to predict and depends very much on the material type, but shortages and cost increases are still the norm for every polymer.

Contact Mike Boswell

Managing Director – Plastribution Group

Contact Ian Chisnall

Product Manager – Polyolefins

Contact Andrew Waterfield

Product Supervisor – Styrenics

Contact Sharron Jarvis

Product Supervisor – Engineering Polymers

The latest updates sent straight to your inbox

Simply enter your details below to subscribe to Price Know-How
Please note: By clicking subscribe, you agree to Plastribution Limited’s Terms and Conditions and Privacy Notice.