Market participants across the region report that suppliers are asking customers to pay additional fees on top of previously agreed prices, citing sharp cost increases triggered by the Middle East conflict and disruptions to shipping through the Strait of Hormuz.
According to trading sources, the extra charges vary depending on the producer and product but generally range from about $250/ton to more than $500/ton for polyolefins and PVC.
A trader in Vietnam said these are not typical price adjustments, explaining that producers argue the cost environment has changed so dramatically that earlier agreed prices no longer cover production and logistics expenses.
Logistics disruptions and feedstock spikes behind the move
The surcharge requests come as the petrochemical industry faces rapidly rising feedstock costs, freight rates, and insurance premiums following the escalation of tensions in the Middle East.
Prices for crude oil, naphtha, and LPG have surged, while shipping companies have introduced emergency conflict surcharges for cargoes moving through or around the Gulf region.
At the same time, logistical uncertainty has intensified as tanker routes are reassessed and transit times increase due to heightened security risks.
A Southeast Asian trader noted that freight, insurance, and feedstock costs have all jumped within days, prompting producers to pass part of the unexpected cost burden to buyers.
Buyers face difficult decisions
For many Southeast Asian converters and distributors, the new surcharges present a difficult choice. With Middle Eastern cargoes already limited and many suppliers suspending fresh quotations amid extreme volatility, buyers have few alternatives to secure material.
Some customers are reportedly accepting the additional charges to avoid shipment delays, while others are attempting to renegotiate volumes or postpone purchases.
A regional distributor said that replacement cargoes are either unavailable or even more expensive, making supply security a higher priority than price negotiations.
More producers could adopt similar measures
Market participants believe that surcharge requests could become more widespread if the conflict continues to disrupt energy flows and global logistics.
Traders say the producers currently requesting surcharges include major suppliers from the Gulf region as well as a leading Southeast Asian producer, suggesting the practice may spread further in the coming days.
With Asian polymer markets already experiencing sharp price rallies and severe offer shortages, the introduction of emergency surcharges is expected to increase volatility and make price discovery more difficult in the weeks ahead.
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