Iran war disrupts raw material supply, makes plastic, GI fittings market unstable
Shipments are being delayed, raising concerns among manufacturers.
Ongoing conflict in the Middle East has begun to impact Bangladesh's plastic and GI (galvanised iron) fittings market as it led to the closure of the Strait of Hormuz.
Shipments are being delayed, raising concerns among manufacturers.
Industry insiders say a significant portion of raw materials – especially polymer resins used in plastic pipes and fittings, and steel or galvanised sheets used in GI products – are import-dependent. Around 65-70% of these materials come from the Middle East. Currently, nearly 80% of shipments from the region are facing delays, while raw material prices have surged by 50–60% in many cases.
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The traders attribute the disruption to rising shipping costs, higher insurance premiums and increased security risks due to the conflict. Shipping companies are exercising greater caution on certain routes, while insurance costs have also increased, extending delivery times.
Local manufacturers are already feeling the strain, with production plans being disrupted. Many firms are now seeking alternative suppliers, while others are trying to build up additional inventories.
If the situation persists, the sector could face a major crisis; possibly worse than during Covid.
Industry owners said key raw materials include PVC, PPR and HDPE resins for plastic products, and steel sheets and galvanised materials for GI fittings. Much of these are sourced from Saudi Arabia, the UAE and Iran, while galvanised sheets also come from the Middle East and Turkey. China, India and South Korea supply a smaller share.
Riyad Mahmud, managing director of National Polymer Industries Ltd, said raw material deliveries that previously took three to four weeks are now taking six to seven weeks, with some shipments facing uncertainty over arrival.
"If the situation persists, the sector could face a major crisis; possibly worse than during Covid," he said, adding that reduced supply may force companies to raise product prices.
Kamruzzaman Kamal, marketing director of PRAN-RFL Group, said uncertainty in import timelines has disrupted production planning. "We are trying to source raw materials from alternative suppliers to keep production running," he said, noting that costs are rising as companies turn to alternative routes and sources.
Mohammad Mostafa, managing director and CEO of Sajan Group, said prices of many raw materials have already increased by 50-60%. "Even after paying higher prices, timely delivery is not assured, putting pressure on the entire supply chain," he said.
According to industry estimates, Bangladesh's plastic and GI fittings market is valued at around Tk6,500-Tk7,000 crore, with more than a hundred companies operating in the sector.
Stakeholders said the market had started to stabilise after the recent national elections, with construction activities picking up and demand for pipes and fittings rising. However, the Middle East crisis now threatens that recovery.
Experts note that the plastic and GI fittings industry is closely linked to the construction sector, with products widely used in housing, infrastructure, water supply, drainage, gas connections and agricultural irrigation. As construction grows, demand for these products typically rises accordingly.
