The war between the United States and Iran in West Asia has not only caused an oil and gas supply crisis and sent energy prices soaring amid a near closure of the Strait of Hormuz, but has also affected products made from plastic and glass. The conflict has disrupted the global plastics and glass market, as disruptions to the supply of oil and key components used in manufacturing affect availability around the world.
Rising oil prices linked to the Iran war are raising the cost of plastic production. (Getty Images via AFP)
In particular, plastic items are partially made from petroleum, the price of which has risen more than 40% since the war began in late February. Glass container manufacturers rely heavily on commercial gas supplies to keep their furnaces running. War between the United States and Iran.
Meanwhile, there are growing fears that the cost of many consumer goods could rise as key raw materials become more expensive.
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The impact of the war between the United States and Iran on the plastics industry
The rise in materials prices is being driven by higher oil and natural gas prices, which have soared in part due to Iran’s threats to shipping in the Strait of Hormuz. This route is crucial for global energy and petrochemical supply chains.
According to the Center for International Environmental Law, more than 99% of plastics worldwide are produced using fossil fuels.
As a result, higher energy costs are increasing both production expenses and the price of raw materials. This includes polyethylene (PE) and polypropylene, two of the most used plastics worldwide.
Western Asia remains a key supplier of plastic raw materials. The region contributes almost 25% of global polyethylene and polypropylene exports, according to data from S&P Global Energy. Buyers have been cautious about delivery times from West Asian suppliers due to delays in transit through the Strait of Hormuz and congestion at ports in the region, according to the data.
While plastic resin prices have already increased in most manufacturing sectors around the world in the last 30 days, another problem is the lack of substitutes for plastics.
Plastics are widely used in industries such as packaging, construction, automotive and healthcare. Switching to substitutes such as paper or glass is expensive and time-consuming, requiring major changes to production systems. cnn he said in a report.
The West Asian crisis and its impact on glass manufacturing
The glass industry has also been greatly affected by the West Asian crisis due to its large energy needs. Gas furnaces must operate continuously at temperatures above 1,000 degrees Celsius (1,832 degrees Fahrenheit) to keep the glass in a molten state and prevent defects.
India’s heavy dependence on gas in sectors such as industry, households, agriculture and public transport makes its factories among the most exposed in Asia.
Suraj Mehta, Chief Strategy Officer, Hindusthan National Glass & Industries, said The economic times“Even a brief interruption in fuel supplies can lead to severe structural damage, significant production losses and prolonged recovery times. The interruptions are creating critical bottlenecks in the supply chain.”
In Firozabad, Uttar Pradesh, the ancient glass and bangle industry is facing a deep supply chain problem, leading to factory closures, lower production and fewer global orders.
Of the 200 glass units registered in the city, only 130 to 140 are still functional. The remaining units have been completely closed, as mentioned in an earlier HT report.
The fuel crisis has worsened due to a sharp drop in global demand, especially from the United States, which has long been the largest buyer of Firozabad glassware and accounts for 60% of the city’s total exports.
