Global Market Update

What Current Global Events Could Mean for Packaging Supply

Global events are continuing to create uncertainty across international supply chains, with ongoing disruptions affecting key shipping routes through the Middle East. These routes are critical for the movement of oil, petrochemicals and the raw materials used to manufacture many packaging products. As a result, businesses across the packaging industry are closely monitoring market conditions.

We are in regular contact with our international supplier network, and this update sets out what we are hearing, how it could affect supply and pricing, and what Primepac is doing in response.

What is driving the current conditions

Three factors are moving at the same time, and they compound one another.

1. Energy and feedstock costs
With major shipping routes under pressure, global oil and petrochemical logistics are facing significant disruption. This supports higher oil prices, which in turn flow through to the resin and feedstock costs that underpin most plastic packaging.

2. Inflation
Higher energy costs eventually feed into transport, manufacturing and consumer prices. Over time this reduces disposable income and can soften demand across the retail and food service sectors many of our customers serve.

3. Market confidence
Where investors question global growth while inflation stays elevated, confidence can weaken quickly. That affects freight capacity, credit availability and the willingness of suppliers to hold inventory, all of which reach back into product availability here in New Zealand.

How this may impact the packaging industry

If current conditions continue, the industry may experience:

• Continued volatility in resin and raw material pricing
• Increased freight and shipping costs
• Longer lead times on selected products
• Ongoing pressure on global manufacturing and supply chains

Our focus remains on providing dependable service, transparent communication and practical solutions to help keep your business moving. This reflects the source's emphasis on securing supply, maintaining reliable service and adapting to changing market conditions.

Where things could go from here

No one can predict this market with certainty. Based on what we are seeing across our supplier base, we would weigh the possible outcomes as follows.

1. Continued volatility MOST LIKELY
Conditions persist without a decisive resolution in either direction.

• Oil and resin pricing remains elevated and moves unpredictably
• Shipping disruption and extended lead times continue
• Inflation stays above central bank targets
• Global manufacturing continues to operate under margin pressure

This is the scenario most likely to run for months rather than weeks, and it is the one we are planning around.

2. Further escalation POSSIBLE
The situation widens and affects additional energy infrastructure or shipping lanes.

• Oil rises substantially above current levels
• Shipping insurance and freight costs surge
• Raw material shortages become more acute
• Recession risk increases across major economies

This is the highest-risk scenario for the packaging supply chain, though at this stage it remains a smaller possibility rather than an expectation.

3. De-escalation and recovery LEAST LIKELY NEAR TERM
International mediation gains traction and conditions begin to normalise.

• Shipping lanes gradually reopen
• Oil prices retreat and resin pricing follows
• Inflation eases over subsequent months
• Markets recover, although supply chains still take time to settle

Even under this outcome, the flow-on effects would take time to reach product pricing and availability. Supply chains normalise more slowly than markets do.

How Primepac is responding

At Primepac, we are committed to helping our customers navigate changing market conditions with confidence. Our team is actively:

• Working closely with our global supplier network to help secure product availability
• Monitoring international market developments and pricing trends
• Managing inventory to support reliable supply
• Keeping customers informed of any significant market changes that may affect pricing or availability

Our focus remains on providing dependable service, transparent communication and practical solutions to help keep your business moving.

Looking ahead

The global market can change quickly, and we will continue to monitor developments closely. While no one can predict exactly how conditions will evolve, maintaining strong supplier relationships, reliable inventory and open communication allows us to respond proactively as the market changes.

In our experience, periods like this reward planning over reaction. Businesses that hold steady, keep sensible stock positions and work closely with their suppliers tend to come through in better shape than those chasing the lowest price week to week. Disciplined planning and long-term partnerships create more value than trying to time a market that no one can time. That is the approach we will continue to take on your behalf.

Questions about your supply?

If you have any questions about product availability, upcoming orders or market conditions, please get in touch with the Primepac team. We would rather have the conversation early than have you find out late.