Iran War Is a Sudden Boon for US Plastic Makers

A once-stagnant corner of American manufacturing just got a wartime jolt. At the Wall Street Journal, John Keilman reports that the Iran conflict and Tehran's move to block the Strait of Hormuz have abruptly turned US plastics and chemical companies into standout market winners, led by Dow and LyondellBasell. With Middle Eastern producers forced to curb output and European and Asian plants cut off from Persian Gulf crude, prices for key plastics like polyethylene and polypropylene have surged at a pace one veteran analyst says he's never seen. Dow has pushed through multiple polyethylene price hikes in weeks and is running its "cracker" facilities nearly flat out; its stock is up about 77% this year, while LyondellBasell's has jumped roughly 84%.

The flip side: companies that buy plastic resin—including packaging makers and toymakers—are getting squeezed. CNN notes that consumers will soon see that reflected in higher costs, eventually even including automobile costs. "There are not a lot of substitutes for plastics," says NYU economics professor Joseph Foudy. Analysts say US producers' edge could last a year or two before global ethane competition erodes it. For the full breakdown of winners, losers, and how long this boom might last, read Keilman's piece in the Wall Street Journal.