Aerial view of a petrochemical plant with storage tanks

Market note, 31 August 2026. Directional analysis rather than a resin price quotation. Check current landed prices with your own supplier.

HDPE, LDPE and polypropylene all begin life in an oil and gas stream. When crude moves sustainably, polymer follows, usually after a lag of weeks rather than days as producers work through existing feedstock. With Brent around $90 after the weekend’s Hormuz escalation, that lag is the window plastics producers have to think in.

Why this is the cost line that decides your year

In a film or moulding operation, raw material is normally the largest single cost and the one you have most control over. Everything else is smaller. Which means a producer who cannot calculate his own cost per unit to the gram is quoting customers on feel, and will not notice a margin disappearing until the month closes.

The calculation, if you do not already have it

Bag weight equals length times width times two, times thickness, times resin density. Work in centimetres and grams. Polyethylene runs around 0.95 grams per cubic centimetre for HDPE and about 0.92 for LDPE. An ordinary shopping bag at 30cm by 45cm and 40 microns: thickness in centimetres is 0.004, so 30 times 45 times 2 times 0.004 gives 10.8 cubic centimetres, and at 0.95 that is 10.3 grams of resin. A tonne of resin therefore gives roughly 97,000 bags. That figure is the foundation of every quotation you will issue, and it takes thirty seconds to produce. Once you have it, a resin price movement translates directly into a cost per bag, and you can see immediately whether your current selling price still works.

What producers get wrong when input costs rise

They hold their price and hope. This happened after the Lagos 40 micron rule. Complying with the minimum uses about 33 per cent more resin per bag than the 30 micron film the trade was built on, so material cost per bag rose by a third and output per tonne fell by a quarter. Producers who kept selling at the old price were losing money on every carton and mostly did not realise for months. The ones who did the arithmetic raised prices, explained why, and kept their margin. The rule did not remove demand. It moved the price floor, and only the factories doing the sums moved with it. A resin rally works the same way.

The hedge you already own

Scrap. Trimmings, start-up waste and rejected rolls are resin you have already paid for at full landed price. A crusher and pelletiser return most of it to the process, which is why that equipment usually pays back faster than anything else in the plant. In a rising input market it pays back faster still.

Buying extrusion or recycling equipment? We settle the specification against your material and your real throughput, and we build the landed cost in naira with each line shown separately. Get in touch.