Renewed US-Iran tensions in July 2026 disrupted shipping through the Strait of Hormuz, triggering fresh volatility across crude oil, petrochemicals, and the POF shrink film industry. Compared with the March flare-up earlier this year, the market’s fundamentals, cost pressures and profit landscape differ drastically, creating a stark performance gap between standard POF films and high-end crosslinked films.

In March, widespread panic gripped supply chains. Blockages hit both the Persian Gulf and Red Sea, pushing Brent crude up over 30% and sending LLDPE feedstock prices surging. The packaging sector was then in its spring peak season, with robust demand from food and pharmaceutical buyers. Distributors rushed to stock up to hedge against further price hikes. Most film manufacturers held less than 10 days of raw material inventory with limited long-term supply contracts, allowing standard POF makers to raise prices by nearly 20% and cushion losses temporarily.

July’s market backdrop stands in complete contrast. Lessons learned from March pushed producers to build 15–30 days of raw material reserves and secure long-term contracts covering 70% of production capacity. Crude’s upward rally was far milder, with feedstock hikes only one-third of March’s level. Worse still, packaging has entered its seasonal off-season. Downstream buyers have been destocking after overpurchasing in spring, lacking funds or willingness to restock in bulk, which severely limits manufacturers’ ability to pass rising costs to clients.

The two film categories display vastly different risk resistance. Low-threshold, oversupplied standard POF films face brutal homogeneous competition. Makers can only lift prices slightly while order volumes drop month-on-month, forcing many small factories into losses and shutdowns more severe than those seen in March. Crosslinked films, however, feature technical barriers and serve loyal high-end clients in pharmaceuticals and electronics. These buyers tolerate moderate price adjustments, keeping crosslinked film makers consistently profitable with only minor margin compression.

Logistics pressure has also eased greatly. March saw tripled sea freight rates and 20-day delivery delays, while July only faces partial Gulf disruptions with smooth Red Sea routes and modest freight growth.

This pair of geopolitical shocks reveals a clear long-term trend: low-margin standard POF films struggle through market downturns, whereas value-added crosslinked films act as a reliable buffer. The current price surge will last merely 2–3 weeks before fading. For industry players, cutting excess low-end POF capacity and locking long-term crosslinked film supply chains remains the most viable strategy to weather market turbulence.