Plastic Resin Prices Rise with Oil Surge, Putting Heavy Pressure on Businesses
Plastic resin prices are moving in tandem with rising oil prices, significantly narrowing profit margins for plastics manufacturers.
At the beginning of 2026, geopolitical instability—particularly tensions involving Iran, Israel, and disruptions around the Strait of Hormuz—severely affected global oil supply, driving oil prices sharply higher while reducing supply by an estimated 20%.
As a result, resin prices reversed course after declining throughout 2025 due to oversupply, unexpectedly surging from early 2026.
According to market data from independent commodity intelligence provider ICIS, part of the RELX Group, prices of several polyethylene (PE) resin grades have increased by 15–30% since the beginning of 2026, as the Middle East accounts for more than 40% of global PE export supply.
Meanwhile, polypropylene (PP) resin prices have risen by approximately 12–25% amid tightening supply and stronger demand. Asia has recorded even steeper PP price increases, as PP production in the region remains heavily dependent on naphtha-based petrochemicals, while many other markets are increasingly shifting toward liquefied natural gas (LNG)-based feedstocks.
Similarly, polyethylene terephthalate (PET) resin—widely used in premium plastics, medical packaging, and food-grade applications—has also recorded price increases of 15–30%, driven by tighter supply of paraxylene, another petroleum-derived raw material.
“Plastic resin prices have unexpectedly surged by dozens of percentage points within a short period. At the same time, resin imports from the Middle East have declined sharply, creating substantial challenges for manufacturers,” said Hoang Duc Vuong, Vice Chairman of the Vietnam Plastics Association (VPA), in an interview with TheLEADER.
According to the VPA, one of the structural weaknesses of Vietnam’s plastics industry is its heavy reliance on imported materials. Approximately 70% of raw material demand depends on imports, while domestic production satisfies only around 30% of manufacturing needs.
Some major plastics manufacturers, including Tien Phong Plastics Joint Stock Company, rely almost entirely on imported resin.
As resin costs rise, production expenses escalate significantly, given that raw materials account for 70–80% of total manufacturing costs. However, according to the VPA, many export contracts had already been signed before the price surge, leaving manufacturers unable to adjust selling prices. As a result, profit margins are shrinking, and some companies are even struggling to fulfill orders amid resin shortages.
Industry Impact Becomes Increasingly Uneven
The impact of higher resin prices has not been uniform across the plastics sector.
Packaging manufacturers, which rely heavily on PE and PP resins, are currently facing the strongest pressure.
Several businesses have already raised prices. Wholesale plastic bag prices, for example, have increased from approximately VND 40,000 per kilogram to VND 55,000 per kilogram, significantly increasing operating costs and forcing producers to sacrifice margins to retain customers.
Meanwhile, construction plastics companies—including Binh Minh Plastics (BMP), Tien Phong Plastics (NTP), and Euro Pipe—have begun implementing price increase strategies to offset rising raw material and logistics costs, particularly for HDPE-based products.
For PVC products, which account for a significant share of Tien Phong Plastics’ product portfolio, the company holds a competitive advantage thanks to inventory worth more than VND 1.4 trillion, according to its financial statements as of the end of 2025. This inventory buffer allows the company to maintain stable production for several months while waiting for material prices to cool.
Meanwhile, Tien Phong Plastics’ largest competitor, Binh Minh Plastics, benefits from access to raw materials through its parent company ecosystem, SCG Group (Thailand).
SCG has resumed commercial operations at the Long Son Petrochemical Complex (LSP), helping stabilize resin supply for its plastics subsidiaries. At the same time, the group is accelerating its transition toward LNG-based feedstock for LSP, reducing dependence on volatile oil prices and supply-demand fluctuations.
Domestic Supply Seen as a Long-Term Solution
Future resin price trends remain difficult to predict as geopolitical conflicts continue without resolution.
In the face of ongoing global uncertainty, VPA representatives argue that the most sustainable long-term solution is to strengthen domestic resin supply capacity, including expanding the availability of recycled plastic materials to reduce import dependence.