The global EPS market experienced a strong upward movement during Q2 2026. The main pressure came from higher raw material costs, tighter supply conditions, and disruptions in international trade. Geopolitical tensions between the US and Iran and problems around the Strait of Hormuz created uncertainty for petrochemical shipments. This affected the availability of styrene and other important feedstocks used in EPS production.

For manufacturers, the increase in crude oil prices during April and May added another layer of pressure. Crude oil is closely connected with the wider petrochemical industry, so higher oil values can eventually raise the cost of producing several polymer materials. EPS producers therefore faced higher input expenses during much of the quarter. These costs were gradually reflected in offers to buyers across different markets.

At the same time, demand remained relatively firm. Construction companies continued to use EPS for insulation and other building applications, while packaging manufacturers maintained their requirements for protective packaging materials. This combination of higher production costs and steady consumption created a supportive market environment during the first part of the quarter.

Supply Disruptions Put Pressure on the Market

Supply was one of the most important factors behind the increase during Q2. The disruption around the Strait of Hormuz affected the movement of petrochemical materials and created uncertainty among buyers and sellers. Import-dependent markets became more cautious because the timing and cost of incoming cargoes were less predictable.

Higher freight expenses also added to the problem. When transportation becomes more expensive, the final delivered cost of imported material rises even if the producer's original offer has not changed significantly. Buyers therefore had to consider the combined effect of the EPS material cost, freight, and other logistics expenses.

Some companies responded by purchasing material earlier than usual to protect themselves from possible supply shortages. This type of precautionary buying can provide additional short-term support to the market. It can also reduce available spot material, especially when producers are already dealing with higher production costs.

Construction Demand Remains Important

The construction sector remained an important source of demand during Q2 2026. EPS is commonly used in insulation and building-related applications because of its lightweight nature and suitability for thermal insulation.

When construction activity remains healthy, demand for insulation materials can provide steady support to EPS consumption. Buyers may continue purchasing even when prices are rising because the material is required for ongoing projects.

Packaging was another important demand segment. EPS is used to protect products during transportation and handling, particularly where cushioning and impact protection are required. Regular demand from packaging applications helped prevent the market from weakening quickly during the quarter.

The combination of construction, insulation, and packaging demand meant that suppliers were able to maintain relatively firm market positions despite changing conditions in the wider petrochemical sector.

Raw Material Costs Influence EPS Values

Styrene remained a key factor in the EPS market during Q2. When styrene becomes more expensive, EPS producers face greater pressure on their production economics. The situation becomes more noticeable when feedstock costs rise at the same time as energy and transportation expenses.

Crude oil prices also played an important role during the quarter. Values increased sharply during April and May, adding cost pressure across the petrochemical supply chain. Producers therefore had fewer opportunities to absorb higher expenses without adjusting their selling offers.

This does not mean that EPS prices always move in exactly the same direction as crude oil. Demand, inventory levels, production rates, imports, and freight costs can all change the final market outcome. However, during Q2, the combination of these factors created a generally firm environment.

India Records a Strong Increase

The Indian market experienced an especially strong movement during Q2 2026. The market increased by approximately 54% during the quarter, reflecting the combined impact of supply restrictions, higher feedstock costs, and healthy downstream demand.

India's dependence on imported raw materials made the market particularly sensitive to international supply disruptions. When shipments became more difficult or expensive, domestic producers and buyers faced higher replacement costs.

Construction and insulation applications continued to provide strong demand. Packaging requirements also remained steady, helping maintain purchasing interest. Because supply conditions were tight, buyers were more careful about securing sufficient material for their operations.

Inventory levels remained constrained during the quarter. When inventories are not very high, buyers can become more sensitive to changes in supply availability. A delay in imported feedstock or finished material can quickly influence purchasing decisions.

The result was a strong increase in the Indian market through most of Q2. The Expandable Polystyrene (EPS) Price Trend in India remained firm as higher input costs and limited availability supported supplier offers.

Why the Indian Market Was More Sensitive

Several factors made the Indian market more exposed to changes in international conditions. Imported feedstocks play an important role in local production economics, so disruptions in global trade can have a direct effect on domestic costs.

Freight is another important consideration. If shipping costs rise, importers need to pay more to bring material into the country. These additional expenses can eventually be reflected in domestic selling offers.

Currency movements, inventory conditions, and local demand can also influence the final market situation. In Q2, the combined impact of these factors contributed to the particularly strong increase seen in India.

Buyers therefore had to balance the need to maintain inventory against the risk of purchasing at elevated levels. Some companies preferred to secure material because supply uncertainty remained high, while others adopted a more cautious approach.

June Brings a Market Correction

The market began showing a different direction toward the end of Q2. Following the mid-June ceasefire between the US and Iran, some geopolitical pressure started to ease. Shipping conditions also improved, reducing some of the uncertainty that had affected international trade earlier in the quarter.

Chinese offer prices began moving lower, while freight costs also eased. These changes reduced the landed cost pressure for Indian buyers.

Styrene feedstock values also softened. Since styrene is an important input for EPS production, lower feedstock costs provided some relief to producers and buyers.

As a result, the Indian market recorded a correction of approximately 9% in June. This decline did not erase the substantial increase recorded earlier in the quarter. Instead, it represented an adjustment after the market had experienced a very sharp rise.

The change also showed how quickly polymer markets can react when supply conditions improve. Once buyers become more confident about material availability, aggressive purchasing can slow down. Suppliers may then have to become more competitive to maintain sales volumes.

Outlook for the EPS Market

The direction of the EPS market will depend on several factors in the coming months. Styrene costs will remain important because changes in feedstock values can influence production economics. Crude oil movements will also be watched closely because they can affect the broader petrochemical cost structure.

Freight and shipping conditions will be equally important for import-dependent markets. If transportation remains stable, buyers may face less pressure on landed costs. On the other hand, renewed logistical disruptions could quickly change market sentiment.

Demand from construction, insulation, and packaging will also determine how easily the market can absorb changes in supply and production costs. Strong demand could help suppliers maintain firm offers, while weaker consumption could encourage further corrections.

Overall, Q2 2026 was a period of significant movement for the global EPS market. Supply disruptions, higher crude oil values, increased logistics costs, and steady downstream demand pushed the market higher during most of the quarter. India experienced one of the strongest increases, with tight inventories and imported feedstock costs adding to the pressure.

The June correction showed that the market can quickly respond when geopolitical risks ease, freight conditions improve, and styrene costs decline. Going forward, the balance between raw material expenses, international supply, logistics, inventories, and downstream demand will remain central to the market direction.

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