Going to the Source
This month, we’re taking a closer look at the economics behind plastic alternatives. But to understand why these materials often come with a higher price tag, we first need to look at the cost of virgin resin, the foundation of most plastic packaging.
To help us unpack what’s really going on, we sat down with our VP of Operations, Hernan Contreras. He shared insights into the key factors behind resin price volatility, and what that means for the future of more responsible packaging solutions.
1. Can you describe the main factors driving resin price volatility today?
Resin prices are fluctuating due to a mix of factors:
• Raw Material Costs: Prices of oil, gas, and feedstocks like naphtha and ethylene directly impact resin production.
• Supply Chain Disruptions: Plant outages, port congestion, and freight issues limit supply.
• Geopolitical Tensions: Sanctions, tariffs, and shifting global production affect availability and pricing.
• Demand Swings: E-commerce growth and post-pandemic shifts drive unpredictable demand.
• Energy Prices: High electricity and gas costs, especially in Europe, reduce output.
• Regulations: Recycling mandates and carbon taxes influence production costs.
• Market Behavior: Stockpiling and speculative pricing add to the volatility.
Despite hedging strategies, spot prices remain sensitive to global disruptions.
2. How have global events (e.g., oil prices, geopolitical tensions, supply chain disruptions) impacted resin availability and pricing?
From 2024 to 2025, resin pricing and availability have remained volatile due to several global pressures. High oil prices, driven by OPEC+ cuts and geopolitical risks, have pushed up raw material costs. Geopolitical tensions—especially the Russia-Ukraine war and Middle East instability—have disrupted supply chains and increased energy costs, particularly in Europe. Drought-driven limits at the Panama Canal and Suez Canal tensions have slowed global resin shipments. Freight costs remain elevated, and regional price gaps have widened. Some producers cut output due to weak margins, causing periodic shortages. Many buyers are shifting to diversified sourcing and higher inventories to manage risk.
3. Are there specific types of resins that are more prone to fluctuation than others? Why?
Polyethylene, polypropylene, and PVC are most volatile due to oil price swings and demand cycles. Engineering resins like nylon and ABS fluctuate with specialty feedstocks and automotive demand. Bio-based resins are generally more stable but less widely used.
4. How do these fluctuations affect manufacturers and recyclers on a practical level?
Manufacturers face unstable costs, tighter margins, and supply risks, forcing frequent price adjustments. Recyclers see demand swings, with higher virgin resin prices boosting recycled demand, and low prices reducing it.
Both increase stock management and diversify sourcing to stay competitive.
5. How important is local sourcing in achieving price stability?
Local sourcing reduces freight costs, avoids import delays, and shields against global disruptions. It improves supply reliability. For many, it’s a key strategy to counter price volatility. This is why Okeanos has developed a worldwide network with local compounders to be closer, faster and cheaper to our customers.