Iran War Against Israel-US Drives Up Plastic Prices, Recycling Industry Reaps Benefits

The war involving Iran is not only affecting the global distribution of oil but also disrupting the supply of new resin raw materials. This situation has led many producers to switch to recycled plastic as a more affordable alternative. In Malaysia, plastic recycling industry players have recorded a surge in demand since the US and Israeli airstrikes on Iran at the end of February. In addition to the thinning supply of new resins, the prices of new raw materials have also skyrocketed sharply. Managing Director of Sannanda Rika, G. Aushal, said that his company based in Kapar, Selangor, is now receiving more orders from foreign customers. The company processes plastic waste from the European Union and Japan into low-density polyethylene (LDPE) for industrial packaging needs, tarps, and drip tape. Every month, his company produces up to 500 tonnes of LDPE material. At the factory located about 50 kilometres from Kuala Lumpur, plastic waste such as used nappies is crushed and processed into recycled resin. According to Aushal, the Iran war has had a direct impact on the global plastic supply chain. “The Iran war not only affects the flow of oil but also the supply of plastic,” he said, as quoted from The Straits Times, Tuesday, 28 April 2027. He gave an example of one customer from Singapore who previously only ordered once a month now requests deliveries of up to three 40-foot containers every week. One container typically holds around 27 to 28 tonnes. Vice President of the Malaysia Plastic Recyclers Association, Will Low, said that demand for recycled materials has increased by around 20 to 30 percent since the conflict heated up. “At the same time, the prices of some (plastic raw) materials have risen by more than 50 to 60 percent. Therefore, some producers are accelerating plans to increase the percentage of recycled materials in their products,” he said. He explained that recycled resin is now a strategic choice because its price is generally 10 to 20 percent cheaper than virgin resin produced directly from crude oil. “Usually, the final price of recycled resin is 10 to 20 percent lower than virgin resin produced directly from crude oil. We are urging the government to implement Extended Producer Responsibility (EPR) to increase demand for recycled resin,” he said.