Serbian plastic industry grapples with soaring costs, supply uncertainty amid Middle East tensions

With the ongoing U.S.-Israeli war with Iran disrupting global petrochemical supply chains, Serbia's plastics industry, which is highly dependent on imported raw materials, has grappled with the dual pressure of soaring costs and supply uncertainty.

A Serbian manufacturer of pressed polyethylene and polypropylene polymer sheets said that prices of its key raw materials have surged by about 50 percent in the past two to three weeks.

Although the company maintains several months of inventory, it continues to face mounting cost pressures from rising prices of raw materials, natural gas, petroleum, and electricity. Meanwhile, logistics challenges have also emerged.

"Basically, the prices are now very high, doubled then they were like two months ago. And the second thing is supply chain. I mean the logistic and the transportation, especially these days, is too long. It's more than two months," said BWC Group CEO Slobodan Skundric.

Such impact triggered by the war has been felt across Serbia's entire chemical industry, forcing some companies to suspend acceptance of new orders to manage the market volatility.

"Prices of plastic raw materials, which are petroleum derivatives, have climbed to historically high levels, posing severe challenges to the industry's development. Serbia has a very developed plastics industry, with more than 2,600 companies engaged in plastic products manufacturing nationwide. The sector generates export revenues of 1.2 billion euros and holds strategic importance for the country. The price hikes are undoubtedly hard to the industry," said Dragan Stevanovic, secretary of the Association for Chemical, Rubber and Non-Metal Industry with the Chamber of Commerce and Industry of Serbia

In response, the Serbian government has taken actions to mitigate the effects on the economy and people.

"First, the government has prohibited the export of fuel, petroleum, and their derivatives. This ban was extended a few days ago. In addition, the government has lowered certain consumption taxes to alleviate the impact of the current situation on the economy and the public," said Stevanovic.

Serbian plastic industry grapples with soaring costs, supply uncertainty amid Middle East tensions

Serbian plastic industry grapples with soaring costs, supply uncertainty amid Middle East tensions

Serbian plastic industry grapples with soaring costs, supply uncertainty amid Middle East tensions

The U.S. Department of War announced on Tuesday that it has reduced the total number of Brigade Combat Teams (BCTs) assigned to Europe from four to three, returning to the levels seen in 2021.

This decision was the result of a comprehensive, multi-layered process focused on U.S. force posture in Europe, and it results in a temporary delay in the deployment of U.S. forces to Poland, the statement said.

Speaking at a White House press briefing the same day, Vice President J.D. Vance pushed back against media reports that the government had canceled a plan this month to send more than 4,000 troops to Poland, referring to the move as "just a standard delay in rotation" that is aimed at encouraging Europe to "take more ownership over its own territorial integrity."

In a May 2 interview, President Trump said the United States intends to "cut way down" its troop numbers in Germany, describing reductions that would go "a lot further" than the 5,000 personnel the Pentagon had announced a day earlier. Critics argued that the withdrawals are meant to punish NATO allies that did not join the U.S. military operations against Iran.

U.S. Department of War reduces Brigade Combat Teams in Europe