Asia Braces for Industrial Stagnation as Middle East Conflict Severely Disrupts Petrochemical Supply

From cosmetics to ramen, Asian manufacturers grapple with 50% raw material price hikes and critical plastic shortages due to the Strait of Hormuz blockade.

By: AXL Media

Published: Mar 26, 2026, 8:32 AM EDT

Source: Reuters

The Naphtha Crunch and Plastic Shortages

The most critical bottleneck for Asian industry is currently the shortage of naphtha, a key oil derivative sourced primarily from the Persian Gulf. Naphtha is essential for producing the plastics and petrochemicals found in almost all manufactured goods.

South Korea: Plastic film manufacturers have cut production to 20–30 percent of usual output, with some warning of critical shutdowns within two weeks.

Packaging Crisis: Instant ramen giants like Samyang Foods and Nongshim are facing a shortage of polyethylene terephthalate (PET). While some have 2–3 months of inventory, others are scrambling to secure plastic resin for containers.

Cosmetics: Container manufacturers for L'Oreal and K-beauty firms report "little visibility" on material supply beyond June.

Regional Industrial Impacts: Rubber, Toys, and Consumables