Strait of Hormuz Disruption Forces Thai Petrochemical Firms to Cut Production, Hike Prices

Major Thai petrochemical producers are cutting output and raising prices due to Strait of Hormuz disruptions affecting global feedstock supplies. SCG Chemicals declared force majeure at its Rayong Olefins plant, anticipating significant losses. PTT Global Chemical, Dow Chemical Thailand, IRPC, and HMC Polymers are also implementing strict order management, price hikes, or seeking alternative sources. The widespread disruption is expected to ripple through various Thai SME supply chains, impacting sectors from food packaging to medical supplies.

The ongoing disruption in the Strait of Hormuz is severely impacting Thailand's petrochemical industry, a global hub, forcing major producers to implement production cuts and price increases. Regional instability has led to delayed deliveries of essential feedstocks like naphtha and propane. SCG Chemicals (SCGC) has declared force majeure at its Rayong Olefins (ROC) plant, projecting monthly losses of approximately 150 million baht, and is exploring alternative energy sources for other business units. Other significant industrial players within the Map Ta Phut Industrial Estate are also bracing for substantial operational challenges. PTT Global Chemical (GC) has notified customers of heightened uncertainties in logistics and feedstock availability, leading to stringent order management. Dow Chemical Thailand has announced an immediate price hike of $200 per ton for its specialty resin products, directly attributing the increase to unmanageable external costs driven by Middle Eastern geopolitical tensions. In response, IRPC is actively seeking crude oil from alternative sources to reduce reliance on Middle Eastern routes, while HMC Polymers is grappling with elevated maritime insurance premiums and freight delays, warning of potential polypropylene (PP) shortages. This escalating crisis is anticipated to create a ripple effect across numerous Thai SME supply chains, affecting diverse sectors including food packaging, automotive parts, medical supplies, and textiles.