The US-Iran war has caused ‘unprecedented’ raw material shortages and cost increases, the British plastics industry has said.
98% of plastics companies have seen increases in raw material or operational costs, the British Plastics Federation (BPF), the trade association for the UK plastic industry, has found.
The BPF surveyed 104 of its member firms late last month, with 58% reporting either a ‘severe’ or ‘significant’ impact on their operations due to the US-Iran war. While 63% of businesses said they have seen orders delayed or cancelled.
Concerningly, 68% of respondents expected the situation to deteriorate over the next three months.
The BPF says the impact of the conflict is not confined to the availability of virgin polymers but also includes additives, masterbatch, components and machinery and equipment, as well as an increase in freight charges.
The plastics industry is the third largest manufacturing sector, one of the UK’s top ten exporting sectors, and has an annual turnover of around £30.7bn.
Philip Law, BPF’s Director-General, said the threat posed by the US-Iran war is ‘existential’ for many companies in the sector.
“To help ensure the survival of our industry and to protect jobs, costs will have to be passed on down the supply chain,” Law said. “We look to all companies to act responsibly.”
“The UK has had a growing dependence on the Middle East as a source of feedstock and polymers. The war has had an exaggerated impact on the UK’s plastics industry as the UK imports more than half of its plastics raw materials.”
Law said the UK Government should act to protect the industry, which he called ‘central’ to the national interest.
The BPF is calling on the government to relieve the energy costs sustained by companies in the UK plastics industry.
The trade association also wants the government to ringfence and reinvest the Plastics Packaging Tax funds in the UK Recycling infrastructure, as well as review impending regulations that have ‘financial implications’ for the sector.
