Chinese makers of sticky tape, bug zappers and fans feel the pinch as plastic costs soar amid Iran war

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GUANGZHOU – When the war in Iran sent prices of PVC spiking, Mr Li Pengcheng’s factory in Shandong found itself having to make garden hoses at a loss to fulfil orders placed months earlier when the material was much cheaper.

“There was no other way” than for Weifang Baotong Plastic Products to “brace itself” for losses of about one-tenth the selling price of each order, he said. Now the firm has raised sticker prices but is barely making a profit, earning “not even 1 or 2 per cent” per hose to keep sales volumes up.

The Middle East crisis has had a “very big impact” on business, he said, adding that earlier shipments to the region were now stuck at transit ports, and that some customers would buy less as prices rose while they waited to see how the situation developed.

“I’m not very optimistic about the outlook, but we can only take it one step at a time,” Mr Li told The Straits Times on April 15 at the opening of the Canton Fair, China’s largest trade show held twice a year in the southern manufacturing hub of Guangzhou.

Factories like his are steeling themselves to ride out tough times as costs rise and demand takes a hit. The effective closure of the crucial Strait of Hormuz trade route, now in its seventh week, has driven up prices of oil and related products while also making it more expensive to ship goods abroad.

The green tech sector dominated by Chinese firms, however, is getting a lift as the energy crisis lends fresh urgency for countries to transition towards renewables.

China’s factory-gate prices rose in March for the first time in more than three years as inflation began to bite. Its exports also missed expectations to grow just 2.5 per cent in March from a year earlier, slowing sharply from the 21.8 per cent recorded in the first two months of 2026.

At the fair, manufacturers of goods like bug zappers, sticky tape, fans and air purifiers – all of which use petroleum-derived products like plastics – told ST that they had not been able to raise prices in step with costs. In some cases, they were forgoing profits to hold on to customers and weather the current shock.

Mr Ryan He, a business director at fan-maker Toppin, said his company increased prices by about 3 per cent to 4 per cent after the cost of materials surged by more than 10 per cent. And even as there was already “no profit to be made”, buyers were still cutting back, he said.

Multiple businesses ST spoke with said production lines were running as usual for now to fulfil orders placed before the war. But one maker of industrial-grade plastic packaging, for which costs have soared some 50 per cent, said he could cut back on workers’ hours if orders in the coming months shrink.

Some manufacturers also expect orders to take a hit from swelling shipping prices as marine fuel costs increase. Logistics companies are already feeling the pressure.

Mr Mason Xie, a sales manager at Master Union Logistics, said his company’s shipments fell a fifth in March as voyages to Europe and North Africa cost US$1,000 (S$1,300) more per container after the war began, and would take 20 days longer to reach their destination as they had to re-route.

Mr Hu Wenyong, a general manager at Maiyi Supply Chain, said shipments from Shenzhen to Los Angeles now cost US$600 more per container and prices could still rise further.

Still, the mood was not all downbeat, with producers saying they will simply work harder to find new buyers – as they had in the past.

“We’re used to the uncertainty, and will find ways to deal with it,” said Mr He, the fan seller, whose company in 2025 had to grapple with spiralling tariffs imposed by the US, one of its largest markets.

He said the company would look for new customers, seek out new suppliers who can provide better prices, and try to make production more efficient.

Analysts have noted that while Chinese producers are feeling the pain from the global energy and commodities shock, they could be better placed than their peers in other countries to manage costs and potentially grow their share of exports.

“On balance, China’s producers benefit from deeper domestic energy reserves and a fully integrated supply chain,” said Mr Xu Tianchen, senior economist at the Economist Intelligence Unit in Beijing. “They are better positioned in such a war when factories located in other countries may reel from fuel shortages.”

And as the global energy crisis bites, China’s green tech industry, for one, is getting a leg-up.

At solar panel maker Sunergy, orders spiked by 20 per cent to 30 per cent in March from a year earlier, said sales manager Miya Zhou. Many of these were from South-east Asian countries like Indonesia, whose President Prabowo Subianto has pledged to speed up the country’s energy transition, she added.

“Now that oil prices are soaring, (people) are getting more inclined to buy new energy products,” she said, citing how her company’s inventory was “cleared out almost at once” after the energy shock hit. She expects sales in 2026 to double from the year before, in a boon for the industry mired for years in overcapacity.

Exports of new-energy vehicles jumped 139.9 per cent in March from the same period the previous year, according to data from the China Passenger Car Association.

At the Canton Fair, Mr Muhammad Umar Waheed was one of many buyers browsing a cavernous hall filled with all manner of solar panels, inverters and batteries. He was scouting for solar products to sell in Pakistan, where an existing energy crisis exacerbated by the Strait of Hormuz closure has accelerated interest in a pivot to renewables.

High shipping costs will affect the number of units he orders – “If before we were to buy 100, now we’ll buy like 50 to 60” – but will not affect the decision to purchase, he said.

“The people in our country need it, especially in urban areas,” he added, noting that Pakistan faced one of the highest fuel price hikes in the world and recently announced a suspension in the electricity supply for slightly over two hours a day to manage power prices.

Mr Eric Sun, chief executive of My Solar Technology, said that sales in the industry could get a boost if the situation in the Middle East drags on, as damage to infrastructure in war-torn regions meant that demand for new energy storage solutions would be much higher.

But this is far from the road to riches he had hoped for.

“There are three types of wealth that should not be sought,” he said, referring to capitalising on national disasters, war and others’ poverty.

“Even if you make money, there is nothing worth being happy about.”