Plastic Resin Prices Spike 14% as Supply Disruptions Fuel Inflation Risks
Cracks are forming in the plastic shield protecting US shoppers from the next inflation wave. Wholesale plastic resin prices jumped 14% last month after the Iran war disrupted petrochemical supplies, and manufacturers say they're running out of room to absorb the hit. Some polyethylene inputs are up more than 40% this year, with Dow already raising prices.
- US inflation hit 4.2% in May, the hottest reading in more than three years, driven largely by energy costs before plastic price hikes have fully filtered through.
- Some buyers are receiving only about 70% of the resin they need, while lead times have stretched from one month to three.
Squeezed out: The pressure is already reaching corporate America. Costco CFO Gary Millerchip warned that higher resin costs are starting to flow through to merchandise costs, while Lowe’s, Whirlpool, and Cava have also flagged pressure on margins. Packaging executive Edward Dominion expects empty shelves by August or September if shortages persist, raising the risk of a broader consumer squeeze ahead of the midterms.
