South Korean polyethylene (PE) prices have jumped an average of 13% following the US-Iran conflict and the blockade of the Strait of Hormuz, according to a survey by the Korea Plastic Industry Cooperative. The price surge, driven by a 43.7% month-on-month spike in naphtha costs, is now cascading through the supply chain to packaging films, agricultural sheets, and sewer pipes. Overseas buyers sourcing PE from South Korea should prepare for further increases and potential supply tightness.
Price shock across the value chain
A survey of 37 plastic processors by the Korea Plastic Industry Cooperative found that 92.1% had received price hike notices from upstream petrochemical suppliers. The average polyethylene price increase was 13%, with some companies warned of a potential 40% rise starting in April. In February, average per-ton prices for LLDPE, LDPE, and HDPE stood at KRW 1.48 million, KRW 1.63 million, and KRW 1.50 million respectively. In March, suppliers raised prices by KRW 200,000 per ton across all grades.
Naphtha costs drive the domino effect
The root cause is the Strait of Hormuz blockade, which has disrupted crude oil supply. South Korean naphtha import prices (C&F Japan) hit USD 898 per ton on March 16, up 13.8% day-on-day and 43.7% month-on-month. Naphtha is the key feedstock for ethylene and propylene, which are then polymerized into polyethylene and polypropylene. The price spike is flowing directly into synthetic resins used in packaging, construction, and agriculture.
Government response and export controls
South Korea's government and ruling party are discussing emergency measures. Ahn Do-geol, senior deputy floor leader of the Democratic Party, said after a task force meeting that the Ministry of Trade, Industry and Energy will freeze domestic naphtha exports at last year's levels and seek alternative import sources. This intervention aims to stabilize domestic supply, but it may reduce South Korea's export availability of naphtha and downstream petrochemicals.
What buyers should watch
Importers of South Korean polyethylene and polypropylene should monitor naphtha price trends closely, as further increases are likely if the Strait of Hormuz remains blocked. The 13% PE price hike may not be the last; some processors have received notices of up to 40% increases from April. Alternative sourcing from other Asian producers such as China, Taiwan, or Southeast Asia may become necessary if South Korean supply tightens. The government's export freeze on naphtha could also affect the availability of downstream resins for overseas buyers.
China sourcing context
China, as the world's largest polyethylene importer, may face indirect pressure if South Korean supply is diverted or priced higher. However, China's own petrochemical capacity expansion in recent years provides some buffer. Buyers should evaluate spot availability from Chinese producers as a potential alternative to South Korean material.
Source: Read the original report | Published: March 16, 2026