WILMINGTON — Demand for recycled plastics in the United States has risen sharply as virgin plastic prices climb following the halt of commercial shipping through the Strait of Hormuz, analysts reported in April 2026. Prices for plastics used in car parts, toys, bottles, food containers, cosmetics, and other products began to rise sharply that month.

Roughly half of the global ethylene and polyethylene supply is stranded, constrained, or directly affected by the shipping disruption in the strait, which is also a transit point for 20% of the world's crude oil. Asian refineries and upstream facilities are unable to obtain the material they need for processing, according to Matt Slutzker, principal analyst with Wood Mackenzie, who said the war in the Middle East has affected the supply of plastic packaging. "Recycled plastics are having a major moment," Slutzker said.

Dow Chemical announced price increases of 30% to 40% for polyester and polyolefins in Western markets including the U.S. In late March, the company told customers it planned to double a previously announced price hike in plastic resins. Jim Fitterling, Dow Chemical chief executive, said during the company's first-quarter earnings call that he anticipated prices climbing even higher.

Prices for recycled plastics have remained relatively stable during the period of rising virgin plastic prices. Recycled plastic is typically more expensive than virgin plastic, and transportation costs for recycled materials are high, increasing costs for companies to access the recycled materials market. Most plastic producers have preexisting contracts with plastic suppliers, and some ships at sea are carrying pre-war virgin plastic inventory to processors.

The U.S. recycling sector entered the current period in a weakened state. In 2025, seven U.S. PET recycling plants shut down, representing 25% of the nation's PET recycling capacity. PET, labeled as No. 1 in the recycling labeling system, is the plastic used for water bottles and food packaging. The global recycling market collapsed in 2018, the year China banned imports of most plastic waste after previously importing almost half of the world's used plastic.

"War is not a long term policy," said Steve Alexander, president and CEO of the Association of Plastic Recyclers. He said recycled plastics such as polyethylene may see a temporary boost but that it is unlikely to last, and that the price disparity between virgin and recycled plastics is likely to shift again when the Strait of Hormuz reopens. Alexander said companies will continue using virgin plastic until governments mandate using recycled material because it is plentiful and cheap.

Researchers from UC Berkeley and UC Santa Barbara found that policies mandating the incorporation of recycled material are the most consequential way to reduce plastic waste and overall plastic production. A California law enacted in 2022 requires that by 2032, all single-use plastic sold in the state must be recyclable or compostable.