British media: Asia faces a plastic shortage crisis

Asia is grappling with a plastic crisis. Manufacturers in the region have warned of a plastic shortage as the Iranian oil crisis has disrupted supplies of packaging materials for food, medical supplies, and other consumer goods.

Impeded oil shipments from the Middle East have severely limited naphtha availability—a petroleum product used to produce specialty chemicals for semiconductor manufacturing and a key raw material for plastics.Since the outbreak of the conflict, Asian naphtha prices have nearly doubled, driving up costs of plastic packaging bags, containers, cups, and tableware.

This has fueled concerns about plastic shortages, as manufacturers struggle to obtain packaging materials for products like instant noodles, beverages, and cosmetics.

Indonesia, one of the world's most populous nations and largest plastic consumers, has seen its naphtha suppliers warn retailers that production halts may be unavoidable due to raw material shortages

Over the past month, the store's daily sales have plummeted by nearly half, dropping to 3.5 million Indonesian rupiah (about $201). A sign at the entrance alerts customers to the "skyrocketing prices."

Rising plastic prices could exacerbate inflationary pressures across Asia, where many countries rely on imported energy and have already been grappling with rising costs.

Indonesia relies almost entirely on imports for its naphtha, primarily sourced from the Middle East. Similarly, Japan derives 44% of its naphtha and over 90% of its crude oil supply from this region.

Some Asian petrochemical plants that produce ethylene and propylene—key raw materials for plastics—from naphtha have reduced or halted production.

Indonesia's Chandra-Aslri Group temporarily announced that due to force majeure, it faced difficulties in naphtha procurement, prompting Japan's Mitsubishi Chemical Group and Mitsui Chemical Industries to reduce production as well. Taiwan's Formosa Plastics & Chemical Corporation similarly declared the occurrence of force majeure.

Data from the Japan Petroleum and Chemical Industry Association shows that ethylene producers in Japan using for food packaging have cut production, with an operating rate of just 68.6% – the lowest level ever recorded.

Arianna Susanti, Director of Business Development at the Indonesian Packaging Association, stated that the food and beverage industry has been particularly hard-hit. This sector accounts for 60% of Indonesia's plastic packaging demand.

She also stated, "However, the cosmetics, medical device, and pharmaceutical industries have also been affected."

Last week, Jakarta abolished import tariffs on plastic packaging materials such as polypropylene and high-density polyethylene. Indonesia's Minister for Economic Affairs, Erlanga Hartanto, stated that the move would also help curb rising prices of packaged foods and beverages—a concern for a country grappling with declining consumer spending.

Several Asian economies are also promoting the use of paper packaging or seeking to source naphtha from other countries; Indonesia, for example, has attempted to procure it from India, Africa, and the Americas.

Japanese Prime Minister Sanae Takaichi stated this week that Japan has sufficient naphtha supplies and plastic product inventories to meet demand through the end of this year.

However, Japanese companies are growing increasingly concerned about supply disruptions. Experts warn that widespread supply interruptions could occur as early as this month.

A survey conducted by a consumer goods manufacturers' industry organization among 102 companies revealed that 44% of Japanese food manufacturers have been affected by tight plastic supplies, rising prices, and delivery delays.

Due to tight plastic supplies, a major natto producer and a chain dumpling restaurant have suspended sales of certain products.

In South Korea, the supply of medical supplies such as syringes and intravenous infusion sets is also under pressure due to panic buying and a shortage of plastic packaging.

On April 29, a survey released by the South Korean Ministry of Food and Drug Safety revealed that the total national inventory of syringes stood at 45.59 million units, slightly lower than the 46.46 million units recorded the previous week.

The director of a medium-sized hospital in southern Seoul stated: "Due to long-term contracts, large hospitals can maintain operations, but small clinics already have low inventory levels, and supply delays have now occurred due to shortages of relevant supplies in online and wholesale markets."

In Jakarta, Arif from Durga Plastic Store warned that the situation could worsen. Suppliers noted that their raw materials would only suffice to sustain production until the end of this month. Arif stated, "After May, I don't know if there will be any inventory left."