Plastic Prices Surge, Industry Minister Prepares Recycled Raw Materials
Industry Minister Agus Gumiwang Kartasasmita has emphasised that the government is continuously working to diversify raw materials and promote recycling to maintain national plastic availability amid global geopolitical pressures. Responding to fluctuations in plastic raw material prices and supplies, Agus explained in a statement confirmed in Jakarta on Wednesday (8/4/2026) that the escalation of conflict in the Middle East has affected the global petrochemical industry supply chain, particularly for naphtha, the main raw material for plastics.
“The escalation of conflict in the Middle East has triggered supply corrections in industrial sectors dependent on naphtha as the primary raw material. Given that plastic is a derivative product of petroleum-based petrochemical processes, disruptions in global distribution and production routes are indeed pressuring upstream cost structures,” he said.
In response, the Ministry of Industry (Kemenperin), together with upstream petrochemical industry players, is taking several strategic steps to ensure the continuity of domestic production, one of which is expanding raw material supply sources.
“The industry is actively exploring naphtha supplies from countries outside the Middle East region to reduce regional dependency,” Agus stated.
Additionally, the optimisation of LPG use is being implemented as a buffer raw material in the production process.
“LPG use is being optimised as a buffer raw material to cover naphtha supply shortages,” he added.
On the other hand, they are also encouraging the increased use of high-quality recycled plastic as a raw material substitute.
“The government is encouraging the increased use of recycled plastic or high-quality recycled plastic as a supply substitute to maintain stock stability in the market,” he clarified.
Regarding the issue of stock limitations reportedly sufficient only until May, Agus assured that the industry condition is still in an expansion phase.
Based on data from the Manufacturing Confidence Index (IKI), the packaging industry subsector in March 2026 showed very high performance, so plastic product stocks are deemed sufficient.
“Supply security efforts continue to run in parallel,” he stressed.
Nevertheless, he acknowledged price corrections at the production level in line with rising global raw material costs. However, the government ensures that product availability remains maintained.
“There is indeed a price correction at the production level due to rising global raw material costs,” the Industry Minister said.
“The public and downstream industries need not panic because plastic products are assured to still be available in the market. The government is committed to ensuring no stock shortages by optimising various alternative supply channels,” Agus revealed.
Furthermore, they are strengthening synergy with manufacturing industry players to anticipate the impact of global supply chain disruptions. This step is taken to maintain national industry resilience while ensuring that domestic and export needs continue to run optimally.