KUALA LUMPUR: Escalating conflict in the Middle East is beginning to ripple through global petrochemical supply chains, raising costs and tightening supply for the plastics manufacturing sector, the Malaysia Plastics Manufacturers Association (MPMA) said.
The association said disruptions around the Strait of Hormuz — a key global energy corridor — have affected shipping routes, fuelling uncertainty over oil supply and logistics.
This has driven crude oil prices sharply higher, surging from about US$60–US$70 per barrel to above US$110 in recent weeks.
As plastics production depends heavily on petrochemical feedstocks derived from crude oil and natural gas, the spike is quickly feeding into higher raw material costs and logistical challenges worldwide.
Recent market developments have also seen suppliers imposing surcharges of up to US$250 per metric tonne on resin shipments, reflecting rising freight costs and supply disruptions.
MPMA president CC Cheah said the plastics sector operates within a highly integrated global supply chain, making it particularly sensitive to geopolitical shocks.
“When energy markets and shipping routes are disrupted, the effects cascade across the entire petrochemical and manufacturing ecosystem,” he said.
He added that many manufacturers are already feeling the strain, with limited buffer stocks of critical materials.
“In some cases, raw material prices have risen by nearly RM3,000 per metric tonne within a week, while certain inputs have recorded increases exceeding 70 per cent compared with previous levels.
“If disruptions persist, manufacturers may face growing difficulty securing sufficient resin supplies to maintain stable production in the coming months,” he said.
Despite these challenges, MPMA said local manufacturers are taking proactive steps, including diversifying supply sources to reduce dependence on any single route or supplier.
The plastics industry remains a key part of the industrial ecosystem, supplying essential materials for food packaging, healthcare products, logistics, electronics, automotive components and a wide range of consumer goods.
“Manufacturers are doing everything possible to sustain production and ensure continued supply to downstream industries and consumers.
“Our priority is to keep factories running and support national supply chains during this period of global uncertainty,” Cheah said.
At the same time, the association called for understanding from stakeholders and the public, noting that the pressures stem from external geopolitical factors beyond the industry’s control.
“The industry remains committed to supporting the economy and ensuring essential goods continue to reach businesses and households,” he added.
MPMA said it will continue to monitor global developments and engage with stakeholders to mitigate the impact of ongoing disruptions.
