Do you have bags? If you do, please give me a few more.
At about 10 a.m. on the 25th at Singi Market in Michuhol District, Incheon. Customers crowded in front of a bag shop that had just opened its doors. Inside, an employee was fielding calls nonstop to confirm orders, and the plastic bags on the display were visibly dwindling.
With traffic through the Strait of Hormuz down due to the recent Middle East crisis, the supply of plastic raw materials is being disrupted. On the ground, that impact is directly leading to a shortage of "black plastic bags."
A bag shop owner surnamed A sighed, saying, "Even if I want to sell, I can't because there's no raw material to make them, so I can't sell." A sources polyethylene, the raw material for plastic bags, through a raw material dealer and manufactures and sells the bags directly.
◇ Raw material prices jump 60%, production cut in half
A surge in raw material prices and supply disruptions are slashing plastic bag production. In the past month, raw material prices rose about 60%, and as securing volumes became harder, output fell to about half the usual level.
A said, "It's hard to get raw materials even if I offer a premium." In fact, during a five-minute conversation with A, calls kept coming in asking, "Can I buy bags?" A answered, "I'll try to source them so business is affected as little as possible," but could not hide a troubled look.
All over the market, there were customers looking for goods, but merchants who couldn't secure bags to pack them in kept lamenting that "it's hard to keep the business going." That morning, as market shops opened one by one, the front of the bag shop was busy from early on. About 10 people gathered at once, saying, "How much is it?" and "We need to buy while they're available."
Another owner, surnamed B, said, "I use plastic supplied from a factory, but recently the supply volume has fallen due to raw material shortages," adding, "I'm worried the situation will get worse as time goes by."
Behind this phenomenon is a raw material supply problem. Naphtha is a carbon compound produced in the process of refining crude oil and is used as a basic raw material for petrochemical products such as plastic and vinyl. It is called "the rice of heavy and chemical industries."
About 54% of the naphtha imported into Korea comes through the Strait of Hormuz, and analysts say supply disruptions have occurred as volumes fell due to recent instability in the Middle East.
◇ "Worried business will get harder"… volume-based trash bags also "in short supply"
Nearby merchants were worried the situation would drag on. A clothing shop owner, a person surnamed Cho, 35, went around several places in the market the day before to find black plastic bags but failed to get any. Cho said, "Even customers who usually say they don't need bags might ask for more these days, so I'm worried."
Butcher shops, which generate a lot of waste, are having a particularly hard time. Bones and byproducts from meat processing must be put into polyethylene bags for disposal, but even those are not easy to procure. A butcher shop owner, surnamed C, said, "I'm worried whether I can run my business properly because there aren't enough bags for trash."
In the market, plastic bags were still used more than shopping baskets. Most customers were carrying black bags, and even those who brought shopping baskets were often seen transferring items that had been packed in bags.
A fruit seller, a person surnamed Kim, 53, said, "Many people consider plastic bags a free service and often ask for extras, but it's hard to accommodate these days."
The situation is similar for volume-based trash bags sold at supermarkets and convenience stores. Buying them has gotten harder as raw material supply jitters and stockpiling overlap. Jongnyangje.com, a volume-based trash bag seller, recently posted a notice on its website saying, "Production, supply and restocking schedules are not smooth due to the international situation."