The Iran war is hitting packaging supply chains. Are the impacts temporary?

Higher fuel and material costs, shipping disruptions and consumer spending are playing into industry impacts. Certain packaging substrates, such as plastics, bear a greater burden than others.

As the Iran war approaches the one-month mark, impacts to the packaging industry are materializing. Some substrates, such as plastics, are especially feeling the initial effects, but the reach is expected to spread if the conflict drags on, experts say.

Major publicly traded packaging companies’ most recent earnings calls largely occurred just before the war began, so executives did not address the topic at that time. But analysts have been sporadically divulging information about effects and adjusting their projection as information becomes available.

Impact on Plastic Packaging

“It’s not been pretty” for the publicly traded packaging companies within BofA Securities’ coverage, said analyst George Staphos in a March 13 note to investors. The average packaging company’s stock had dropped approximately 10% since Feb. 27, the day before the war started, he said.

An earlier BofA note, on March 6, pointed to companies feeling the effects of the rapid oil price increases, which manifest in the form of higher transport costs. Generally speaking, every $10 per barrel increase in oil prices translates to a few cents per pound increased costs for plastic packaging producers, according to Staphos.

“Packagers would be exposed to energy and freight increases to varying degrees, and some would have more direct spend on oil derivatives,” he said. While packaging companies likely would pass on the costs to customers, higher costs could become a medium-term problem. “Timing lags on pricing increases may cause headwinds for one to six months,” Staphos said.

Consumer Component

Higher gas prices eat into consumer spending, and uncertainty caused by geopolitical matters can further exacerbate that. A hit to consumer spending typically translates into the use of fewer corrugated boxes, and therefore lower packaging demand, experts say.

Plus, inflation and lagging consumer sentiment show up in the sluggish home sales numbers, which significantly influences packaging sales. The seasonal housing market typically ramps up to its annual peak at this point in the year, but the Iran war is among the myriad factors tamping down sales.

“If you don’t get consumers back to the market and buying homes now in April and May, you basically have squandered a year,” because housing sales losses in the first half of the year are “really tough to make up in the back half,” said Michael Roxland, senior paper and packaging analyst at Truist Securities.

Supply Chain Disruption

A key problem is the disruption to traffic through the Strait of Hormuz, a major global shipping pathway, with only a trickle of ships making it through since the war started. That constricts shipments not only of oil supplies, but also raw materials and goods — which both affect packaging.

In the war’s early days, Fastmarkets RISI published a March 4 report noting the decreased activity through the strait created “an immediate aluminum supply shock” for the U.S. and Europe, and the Midwest Premium is among the premiums that had been driven “sharply higher.”

Aluminum and Steel

Specifically, the United Arab Emirates and Bahrain were among the top six aluminum-producing countries in 2024. In 2025, the Middle East accounted for roughly 21% of unwrought aluminum imports and 13% of wrought aluminum imports, according to the U.S.-based Aluminum Association.

Metal packaging companies should be able to pass through much of the additional war-related costs to customers, Roxland said. However, the sector already was bracing for higher prices this year due to factors like 50% Section 232 tariffs and the skyrocketing Midwest Premium.

Source: Packaging Dive

Note: This article is republished for informational purposes. Read the original article on Packaging Dive.

Published on 2026-04-05