Middle East Crisis Impacts Plastics Supply; Shortages Possible in Some Local Sectors

The ongoing Middle East crisis is impacting the energy market, petrochemical raw materials, and global shipping routes, significantly increasing upstream costs and supply chain pressures on Singapore’s plastics industry, potentially leading to shortages in some sectors.

In response to inquiries from 8world News, Lim Kim Liang, President of the Singapore Plastic Industry Association (SPIA), pointed out that as a manufacturing base highly dependent on trade, Singapore’s local plastics industry is closely linked to the global circulation of crude oil, naphtha, ethylene, propylene, and polymer resins. As logistics routes through the Strait of Hormuz and surrounding areas continue to be disrupted, increased volatility in raw material prices, transportation delays, and rising freight surcharges are gradually impacting local manufacturers.

He said that due to tightening supplies of petroleum-derived raw materials, plastic resins widely used in packaging, injection molding, films, consumer goods, medical products, and industrial components are facing upward price pressure.

With the escalating conflict between the US and Iran, several raw material suppliers have declared force majeure, and local plastic manufacturers are facing severe supply disruptions and shortages.

He stated that for plastic processing companies, replenishment cycles may become irregular, production cycles will face challenges, and deliveries may be delayed. The ripple effects are particularly pronounced in industries highly dependent on plastic packaging and components, including food and beverage packaging, disposable medical supplies, household consumer goods, electronic and precision parts, and logistics and industrial packaging.

He pointed out that as costs continue to rise, some manufacturers may have to selectively pass on costs, optimize materials, and reduce material thickness.

He also said that this crisis highlights the necessity of strengthening the resilience of the plastic supply chain. The association is assisting its member companies in reducing their reliance on supplies from the Gulf region and expanding their resin sourcing from Northeast Asia and ASEAN to diversify their risk profile.