Navigating the Current Raw Material Crisis: Our Commitment to Supporting Your Packaging Business Amidst Middle East Tensions

As a professional manufacturer specializing in both compostable bags and traditional PE plastic bags with a focus on export orders, we deeply understand the unprecedented challenges the global packaging industry is facing right now. The ongoing conflict in the Middle East has triggered a sharp surge in global oil prices, which in turn has led to a skyrocketing increase in the cost of petroleum-related plastic raw materials—disrupting supply chains, squeezing profit margins, and creating uncertainty for businesses worldwide. In this article, we aim to shed light on the impact of the current situation on the packaging industry, share insights into effectively avoiding losses, predict future raw material price trends, and most importantly, outline the concrete measures we are taking to support our valued clients through these difficult times.

The Middle East conflict has severely disrupted the global energy market, as the region is a major hub for oil production and transportation. With the Strait of Hormuz—through which approximately 20% of the world’s seaborne oil passes—facing significant navigation disruptions, global oil prices have soared to levels not seen since 2022, with Brent crude futures briefly surpassing $110 per barrel recently. Since more than 70% of general plastics such as PE are derived from petroleum, this oil price surge has directly transmitted to the plastic raw material market, with PE resin prices rising by over 12% in just one week and some grades increasing by more than 700 yuan per ton. For the packaging industry, which relies heavily on stable and affordable raw materials, this has translated into higher production costs, delayed deliveries due to supply chain bottlenecks, and increased market volatility—putting immense pressure on exporters, importers, and end-users alike. Small and medium-sized enterprises, in particular, are facing severe profit squeezes as they struggle to absorb the sudden cost increases without passing them entirely to their customers.

To effectively avoid losses amid this crisis, businesses in the packaging industry need to adopt a proactive and strategic approach. First, optimizing procurement strategies by establishing long-term cooperation with reliable suppliers can help lock in relatively stable prices and ensure raw material supply. Second, reducing reliance on a single raw material or supplier—such as diversifying into compostable alternatives—can mitigate risks associated with petroleum price fluctuations. Third, improving production efficiency and reducing material waste can help offset cost increases. Looking ahead, the future trend of raw material prices remains closely tied to the evolution of the Middle East conflict. If the conflict persists or escalates, oil prices may continue to fluctuate at high levels, keeping plastic raw material prices elevated. However, with the gradual expansion of global bio-based material production capacity and the potential easing of geopolitical tensions, there is hope that raw material prices will stabilize in the second half of 2026, with the price gap between compostable materials and traditional PE plastics narrowing to within 20%. Additionally, the oversupply of global polyolefin capacity may also exert downward pressure on prices in the long run, though short-term volatility will remain high due to geopolitical factors.

At our factory, we firmly believe that standing with our clients through challenges is the foundation of long-term cooperation. As a dual-product manufacturer of both compostable bags and traditional PE plastic bags, we are uniquely positioned to help our clients navigate this crisis with practical and tailored solutions. Firstly, we have proactively stockpiled a large quantity of PE raw materials and established long-term cooperative relationships with multiple high-quality domestic and foreign suppliers to ensure stable supply and avoid delivery delays caused by raw material shortages. We will prioritize fulfilling existing orders at the originally agreed prices, absorbing part of the raw material cost increase ourselves to help our clients maintain stable profit margins.

Secondly, we offer flexible product replacement options to help clients reduce costs. For clients who do not have strict requirements for traditional PE bags, we recommend our compostable bags (made from PLA, PBAT, and starch-based materials) as a cost-effective alternative in the long run. Although the current price of compostable raw materials is 1.5-3 times that of PE materials, the price gap is narrowing, and with large-scale procurement, the price difference can be reduced to 1.5-2 times. More importantly, using compostable bags can help clients comply with global environmental regulations, enhance brand image, and tap into the growing market of eco-conscious consumers—creating long-term value beyond cost savings. We provide free samples and professional consulting services to help clients evaluate whether compostable bags are suitable for their products and markets.

Thirdly, we offer transparent pricing and flexible order terms. For new orders, we will provide real-time and transparent pricing based on the latest raw material market conditions, clearly explaining the cost composition to ensure our clients understand every detail of the pricing. We also support flexible order quantities and delivery schedules, allowing clients to adjust their orders according to market demand and cash flow to avoid inventory backlogs and capital occupation. Additionally, we have optimized our production processes to improve efficiency and reduce material waste, further controlling production costs and passing on these savings to our clients.

Fourthly, we provide professional market insights and risk early warning services. Our team closely monitors the Middle East situation, global oil prices, and raw material market trends, providing our clients with timely updates and forecasts to help them make informed procurement and production decisions. We will promptly notify clients of potential price fluctuations and supply chain risks, working together to develop response plans and minimize losses.

In these challenging times, we understand that every cost saving and every stable delivery matters to your business. As your trusted partner, we are committed to leveraging our strength in dual-product production, stable supply chain, and professional services to stand with you, mitigate risks, and seize opportunities. We believe that through mutual trust and cooperation, we can not only navigate the current crisis but also lay a solid foundation for long-term win-win development. If you have any questions about raw material prices, product options, or order arrangements, please feel free to contact us at any time—we are here to support you every step of the way.