As the Iran war closes out its 11th week, the threats to businesses no longer are theoretical — especially for plastics sectors, including packaging. Higher plastic prices and supply struggles are evident, and experts warn the situation is on the verge of worsening barring a prompt conflict resolution. Regardless of when the war ends, the current impacts to the plastic packaging industry are expected to linger at least for the remainder of the year.
Commodity intelligence service ICIS has reported since March that the Iran war is contributing to a spike in plastic prices, notably for polyethylene and polypropylene. Prior to the war, polymer demand was soft amid a global oversupply of those two resins, and polyolefin producers’ margins had been declining for a couple of years.
“We were getting close to the bottom of the cycle for those raw materials,” meaning producers were at or near the point of rationalizing excess capacity to broaden their margins, Esteban Sagel, principal and CEO at Chemical and Polymer Market Consultants, told Packaging Dive.
The war quickly resulted in tighter supplies for virgin resins amid production disturbances, along with higher prices globally for both virgin and recycled grades, Andrea Bassetti, Americas team lead for plastics recycling at ICIS, told Packaging Dive.
