Rising Plastic Prices: Causes and Impacts on the Market

Rising plastic prices in Indonesia have recently drawn the attention of many business actors. This surge is not without cause, but is triggered by global disruptions in raw material supplies that directly impact the domestic industry. The Association of the Olefin Aromatic Plastic Industry (Inaplas) revealed that the geopolitical situation in the Middle East is the main factor behind the increase in plastic prices. However, the conflict involving Israel, the United States (US), and Iran has disrupted the distribution of raw materials, particularly due to the closure of crucial global energy shipping routes. This situation explains why plastic prices have risen relatively quickly. The global dependence on that region means the impact is felt as far as Indonesia. As a result, naphtha supplies have become increasingly limited. The combination of stalled distribution and disrupted production has left the petrochemical industry facing uncertainty. “And this is not only in Indonesia, almost the entire world,” said Fajar. This condition is one of the reasons for the global rise in plastic prices, not just in the domestic market.