In March 2025, Polyol prices in Europe experienced an increase, driven by ongoing disruptions in the supply chain. Several other factors contributed to the rise, including reduced production from key suppliers. Severe weather and labor strikes at major European ports led to significant delays, further straining the Polyol market. These challenges created a tightening effect, and with rising freight costs and continued shipping difficulties, experts anticipate that Polyol prices will continue to climb as the industry heads into Q2 2025.

The European Polyether Polyol market has been facing substantial pressure. An Arctic Blast in the US amidst increased Propane fuel demand for heating and negatively impacted the Propylene supplies to the European region. Major Polyol suppliers, like Repsol and Dow, reduced their production levels due to tight upstream Propylene supplies. At the same time, the disruptions at European ports, like storms, flooding, and strikes at major locations of Rotterdam and Le Havre, caused widespread delays and longer waiting times. To circumvent these issues, shipping companies have been rerouting vessels around the Cape of Good Hope, further complicating delivery schedules.

Additionally, many local traders in Europe are struggling with low-profit margins and rising transport costs. Major chemical players in Asia, particularly in China and Singapore, might adjust their strategies to cope with the shifting market dynamic and shifting global trade.

Looking at Polyol demand trends, the automotive sector in Europe saw mixed results in February 2025. While the Passenger Vehicle (PV) selling rate improved slightly, increasing to 12.6 million units per year, sales volumes declined by 2.6% compared to the previous year. Geopolitical challenges, such as the possibility of higher tariffs on European imports from the US, along with economic pressures on consumer affordability, are impacting the demand for Polyurethane (PU) in the automotive sector.

The construction sector also faced difficulties, with the eurozone construction industry seeing its sharpest slowdown in three months in February. However, regions like Italy showed a slight increase in new orders, which helped support Polyol based Polyurethane materials demand in construction sector.

The outlook for Polyol demand is mixed for the second quarter of 2025. The automotive sector might get relief from eased in emissions standards in the European Union. In construction sector, there’s cautious optimism in certain regions like Italy. However, the demand outlook for Polyol based PU is uncertain due to fluctuating market conditions.

The Polyol prices are likely to rise further in the second quarter of 2025, because of higher freight costs as shipping activities increases, during the summer months.