Iran War Spikes Global Plastic Costs and Consumer Prices

A war involving the United States and Israel against Iran severely disrupted oil and petrochemical supply chains, leading to a sharp increase in the cost of consumer goods. Disruptions in the Strait of Hormuz, a critical chokepoint for petrochemicals, drove plastic resin prices up by over 30%, while low-density polyethylene prices rose by as much as 55% in the beauty and toy industries.

In India, the largest rigid plastic packaging manufacturer, Alternicq, reported that raw material costs for polymers such as polyethylene terephthalate and polypropylene surged approximately 40%. To manage these costs, Alternicq passed the increases to clients including Marico and Asian Paints. Hindustan Unilever confirmed it is implementing selective price increases across its portfolio to counter inflation in crude, palm oil, and plastics.

While oil producers in the United States and Russia, along with companies like TotalEnergies, saw soaring profits during the conflict, South Korean President Lee Jae Myung called for a transition toward a plastics-free economy. The situation shifted following a ceasefire announcement, which triggered a 6% to 8% decline in the stock prices of energy giants Shell, BP, and TotalEnergies.