March 6, 2026 16:20

The war in Iran, now spreading across the Gulf region, has implications that are difficult to gauge in the short, medium and long term, especially against an economic backdrop already weighed down by uncertainty and geopolitical tension.
Too many variables are in play, from the scale of the conflict to the duration of the blockade of the straits, vital arteries for the movement of energy products, semi-finished goods and finished products.
At the time of writing, around 1,000 ships are stranded in the waters of the Strait of Hormuz.
To identify the main factors that could affect the polymers market, with a particular focus on Europe, we spoke with Paolo Arcelli (pictured), General Manager of Plastic Consult, a consulting firm based in Italy with deep expertise in plastics and specialty chemicals.

The attack on Iran and the recent closure of the region’s straits, beginning with Hormuz, risk worsening an already difficult situation for Europe’s chemical industry. What repercussions can we expect in the short term?
In the immediate term, the effects are already materialising, above all on the energy front: in just a few days, gas prices in Europe have almost doubled and, in Italy, wholesale energy costs have risen by around 60%.
The impact is immediate across the entire chemicals and polymers chain because energy and gas remain decisive elements in Europe’s industrial cost base.
Alongside energy, however, there is also the issue of the goods moving through that area: Hormuz is not only a route for energy cargoes, but also for raw materials and products such as fertilisers and aluminium.

And how are commodity polymers reacting?
Here too, the market reaction has been instantaneous, with requests for triple-digit increases in a number of negotiations. For polypropylene, for example, hikes of as much as €150-200 are being recorded depending on the timing of confirmation, a sign that tensions are feeding directly into price lists.
The main pressure point is logistics: insurance and freight rates are pushing seaborne transport costs higher. On top of that, if routes were to be diverted around Africa, longer transit times and additional volatility would also have to be factored in.

From your vantage point in Italy’s plastics sector, how are processors, distributors and plastics producers reacting?
On the distribution side, a distinction needs to be made between those operating through established relationships with producers and traders; there are differences even within the latter group.
Those brokering material from Asia and the Middle East are likely to be more exposed: if the logistics chain breaks down or becomes too expensive, the repercussions are immediate.
By contrast, companies working with countries less directly involved in the tensions and with more stable logistics corridors — for example, from the Americas — could find themselves in a relatively favourable position, because flows tend to shift towards sources where delivery is more certain.
The Italian market is also shaped by a structural factor: for some plastics, extra-EU imports are predominant. Linear polyethylene is a case in point: last year, extra-EU imports accounted for more than 55% of consumption.
Historically, the largest volumes have come from the United States, but more recently shipments from Asia, especially Korea, have increased. If Asia keeps product at home instead of pushing it into export markets, the centre of gravity shifts again, with effects on both prices and availability.
Paradoxically, European producers could benefit from this, facing less price pressure and thereby regaining competitiveness.

Will plastics processors bear the brunt of the crisis?
Not necessarily. Energy and raw material costs will almost certainly rise, but shortages of goods from Asia could also affect semi-finished and finished products, giving European processors room to raise prices again. To return to the example of linear low-density polyethylene, if until yesterday it made sense to buy rolls from the Far East, tomorrow it may again become more convenient to extrude in Europe.
There are many variables, which makes accurate forecasts difficult: the duration of the crisis, the impact on transport and energy costs, and end-user demand, which will inevitably feel the effects of renewed inflationary pressure.

By the same token, the plastics recycling chain would benefit from higher virgin prices. Could demand recover?
Yes, it is plausible: recycling gets breathing room when virgin prices start rising again. In most applications not yet subject to regulatory constraints, demand for recycled material is linked to the price differential versus virgin. When the latter falls too far — as happened in recent years — the recycling chain suffers because below certain thresholds costs cannot be compressed; when prices rise again, recycled material becomes more competitive and demand can regain momentum.
The market can react more quickly than many imagine. In applications where the use of recycled material is already well established, many companies can rapidly adjust the percentages in the virgin/recycled mix, even from one week to the next, without any plant modifications. This is especially true in several packaging and construction applications, for example trays and blow-moulded containers, sewer pipes and underground cable conduits, as well as certain agricultural uses such as irrigation tapes.
In other words, if the price differential turns favourable again, the use of recycled material can rise quickly, especially where it had been scaled back purely for lack of economic convenience.

Inventory trends can play a crucial role in the balance between supply and demand, especially in commodities. Could inventories push prices up even without a physical shortage?
Inventories can become the real multiplier of tension because, in times of uncertainty, the market stops looking only at price and availability becomes the key factor. It is a dynamic we have already seen in previous crises: fear of shortages triggers a rush of orders that, in effect, fuels further price increases even before any real lack of product materialises.
We are already seeing some signs of this: some polyolefin film producers are reporting an increase in incoming orders of up to 50% from one week to the next. It is a form of risk protection: companies with downstream supply commitments — especially to large, established customers — tend to protect themselves in order to avoid being caught short.
It should also be borne in mind that many companies rebuilt inventories in recent months, taking advantage of year-end price lows for some polymers. But because the picture can change quickly, the inventory variable remains decisive: if fear takes hold, even with warehouses not empty, behaviour can shift towards stockpiling and, as a result, affect both demand and prices.

There are also medium- and long-term effects from blockages on deliveries of raw materials and polymers, both directly from Gulf countries and, indirectly, from Asia. What can we realistically expect for the market?
Over the medium term, more than the initial spike linked to blocked routes, one question matters: how long will the logistical disruption last? If the shock is prolonged, trade flows risk changing in a profound way.
There is also a factor that is often underestimated: simply reopening a route is not enough for everything to return to normal. If military events damage or destroy critical infrastructure such as terminals, plants or refineries, recovery times can stretch into months or years. That is when the shock can become structural.

Could North American producers emerge as the main beneficiaries of the crisis?
It is not automatic, but the trend is fairly clear: if part of the supply base and logistics network from Asia and the Middle East becomes more complicated, those with production capacity and more stable export channels — as is the case for many North American players — tend to be at an advantage. This is true both because some flows may shift in origin, towards where delivery is simpler and more reliable, and because in a tight market demand looks for supplies perceived as safer.
The case of linear polyethylene is emblematic: with Italian imports already heavily supplied by the US, any reduction in Asian exports could further strengthen that role. In other words, the more the crisis selects routes and penalises exposed origins, the more valuable those able to guarantee continuity become.

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