Insight Focus
After the US attack on Iran over the weekend, WTI crude has already gained. A significant increase in oil prices has knock-on implications for plastic packaging. In addition, the effective closure of the Strait of Hormuz as well as the Red Sea is set to disrupt shipping liners, further driving up costs.
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The Iran–US conflict has set off a dual shock for the food supply chain. A freight increase should be expected as capacity is absorbed by Cape diversions and war‑risk measures.
In addition, a prolonged conflict will likely lead to a resin cost escalation. A recent PTA futures spike and MEG forward steepening indicate higher PET and flexible‑packaging costs for at least the next three to nine months.
Together, these forces raise packaging conversion costs, slow delivery schedules and threaten both affordability and availability of packaged food products globally.
Conflict Pushes Up Freight, Oil
In the immediate aftermath of the February 28 US air strikes on Iran, there was a severe disruption to global shipping networks, especially through the Strait of Hormuz, a corridor that typically carries around 20% of globally traded oil and significant LNG volumes.
Major carriers, including Maersk, MSC, CMA CGM and Hapag‑Lloyd, suspended transits and rerouted fleets around the Cape of Good Hope, adding 10–14 days to transit times and sharply increasing transport costs.
Just before the conflict on the week of February 26, the Drewry World Container Index (WCI) stood at USD 1,899/FEU, its seventh consecutive weekly decline amid rising vessel capacity and seasonal post‑Lunar‑New‑Year softness.
Source: Drewry
However, the effective closure of the Strait of Hormuz and subsequent rerouting will inevitably tighten global capacity. Carriers have introduced war-risk surcharges of around USD 2,000/TEU or USD 3,000/FEU for some Middle East‑linked cargo, which immediately elevates delivered freight costs.
Combined with Cape diversions, these measures effectively remove vessel capacity from rotation, historically exerting upward pressure on WCI levels. We therefore expect imminent upward movement in Drewry’s index as the shock filters through first‑week‑of‑March assessments.
Plastic Packaging Inputs: PTA & MEG
ZCE PTA Futures fluctuated between RMB 4,500 and 5,200/tonne through late 2025, but from January–March 2026 have trended sharply upward toward RMB 5,500/tonne, indicating tightening supply and higher feedstock–energy correlations as crude markets react to Middle East risk.
The ZCE PTA forward curve peaks around early‑to‑mid 2026 at around RMB 5,550/tonne before sloping steadily downward toward 2027, reflecting expectations of easing fundamentals later—but with a pronounced near‑term cost premium.
DCE MEG Futures fell from RMB 4,300 RMB/tonne in mid‑2025 to RMB 3,500–3,600/tonne by early 2026, before stabilising at the bottom. But there was a sharp uptick from RMB 3,489/tonne on February 27 to RMB 3,635/tonne on March 3.
In contrast to futures, the DCE MEG forward curve rises from RMB 3,900/tonne as of May 2026 toward RMB 4,150/tonne by early 2027, signalling structural cost expectations tied to higher logistics, insurance and feedstock risks.
Implication for PET & Plastic Packaging
PTA and MEG are the two dominant PET feedstocks. This means the PTA upswing and MEG forward uplift together imply higher PET resin production costs into mid‑2026. This reinforces broader resin‑market observations. PET shows mixed regional movements but is poised for upward pressure as energy markets react to disruptions.
Routes critical for food‑grade packaging (films, bottles, closures) now face both higher freight rates and higher polymer input costs. Freight shocks historically pass through to consumer‑goods price inflation with a lag. Analysts estimate similar disruptions such as Red Sea rerouting can add 0.7 percentage points to core goods inflation globally.
Cape detours and suspended Gulf/Suez calls lengthen delivery times by up to two weeks, causing shortages of specialist packaging films, preforms, barrier materials; longer pipeline inventories; and production stoppages for SKU‑specific components. Regions dependent on seaborne grain, sugar, edible oils and packaged staples, such as East Africa, MENA and South Asia, face compounding risk after successive Red Sea disruptions since late 2023.
