Overview
- Global oil shipping constraints tied to the Iran conflict have tightened supplies of petrochemical feedstocks and driven sharp increases in basic-plastic prices.
- Plastic makers across Asia have invoked force majeure and cut output as key inputs such as naphtha run short, which is feeding through to polyethylene, PET used in bottles, and polyester for textiles.
- Producers are hiking prices in quick succession, with Dow outlining polyethylene increases for March, April and May, while medical supplier Gentell says it will raise customer prices by 15%.
- Manufacturers are scrambling to manage costs, as Aleni Brands was told polyester and acrylic are up 10% to 15% and a U.S. footwear group projects shoe prices could rise 1.5% to 3% by late summer.
- Economists warn that oil above about $90 a barrel for months would amplify inflation through packaging, clothing and medical supplies, even as U.S. plastics producers gain from domestic feedstocks.