JAGARAN CHAKMA

Bangladesh’s plastics industry is facing a severe disruption, as the ongoing US-Israel war on Iran rattles global energy and petrochemical markets, industry insiders say.

With oil flows and key shipping routes like the Strait of Hormuz under strain, raw material supply has tightened sharply.

Manufacturers in the country warn stocks may last only weeks, raising fears of production cuts, higher prices, and pressure on exports.

Resin, the key raw material for plastics, which used to cost around $900-$950 per tonne, is now selling at $1,500-$1,600, as crude oil prices have surged from about $60-$70 per barrel to $115-$120, sharply increasing production costs.

The pressure is already visible across factories.

“Some factories are facing shutdown within 10 to 16 days if supplies are not restored,” said Anisur Rahman, deputy executive director of Premiaflex Plastics Limited under ACI PLC.

“Some companies have stock for a week, others for a month or two. But beyond that, uncertainty is overwhelming,” he said.

Industry insiders noted that the core issue is a supply shortage rather than cost.

“Even if we offer Tk 100 to purchase something that used to cost Tk 10, suppliers cannot deliver,” Rahman said.

To cope, manufacturers are funnelling raw materials towards producing some selected products, aimed at a specific section of customers who are willing to accept higher prices, he said.

The situation has been further complicated by difficulties in opening and adjusting letters of credit (LCs), with many suppliers unable to fulfil orders or demanding revised terms.

Prices of LLDPE, a key packaging material, have risen from around $1,900 to $2,100-$2,200 per tonne following the Middle East conflict, while some LLDPE grades are now unavailable.

Rahman said his factory may continue operations for the next one to two months, but warned that prolonged instability could trigger widespread shutdowns.

The strain is not limited to a segment of the market, but has spread throughout.

RN Paul, managing director of RFL, said the company can continue operations for only about two more weeks using existing inventory amid ongoing supply constraints.