Middle East Supply Disruptions Push Asian Plastic Prices Up Sharply

Plastic product prices across Asia have surged by 50% to 90% in recent months due to severe disruptions in naphtha supply, a key petrochemical feedstock derived from crude oil. The supply issues stem from the ongoing security crisis in the Strait of Hormuz, a vital shipping route for Middle Eastern naphtha, which accounts for about 54% of Asia's imports. The conflict involving the United States, Israel, and Iran, which escalated in late February, caused naphtha prices to spike by approximately 74% within the first two weeks.

This price surge has significantly impacted manufacturers and small traders, with consumers beginning to feel the effects as well. For example, in Taipei's Sungjiang market, plastic bag prices have risen nearly 60%, while in Thailand, plastic resin costs have jumped between 60% and 90%, directly increasing production expenses for everyday goods. Major petrochemical companies in South Korea and Japan have reduced operations, with Japan halving production capacity at cracking facilities and Taiwan's Formosa Petrochemical declaring force majeure after shutting down one plant and reducing output at others.

In response, South Korea has restricted naphtha exports to secure domestic supply. According to PolymerUpdate, polymer prices have risen about 41% to 42% since the crisis began, reflecting ongoing supply chain pressures. A partial recovery occurred in late June following a US-Iran memorandum to temporarily reopen the Strait of Hormuz for 60 days, but shipping activity remains at roughly half of pre-conflict levels. Additional security incidents, including an Iranian drone attack on a cargo ship, continue to threaten stability.

Despite some recent commodity price declines, many producers are still using inventory purchased at peak prices, delaying consumer price relief. Industry forecasts suggest that elevated plastic and packaging costs will persist at least through the third quarter of 2026.