Intensified fluctuations in plastic futures and rising international oil prices due to geopolitical tensions in the Middle East have not resulted in a substantial disruption of plastic raw material supplies in Dongguan, a major plastic distribution center in Guangdong province, according to an industry insider.

"The overall supplies of plastic raw materials in Dongguan remain stable, as the proportion of supplies from Iran is actually quite low," said Xu Yina, secretary-general of the Dongguan Plastic Industry Association.

Addressing concerns related to supply, Xu said the sources of plastic raw materials in Dongguan and the Pearl River Delta region are diverse, mainly including domestic suppliers, Southeast Asia and the Middle East.

Xu's remarks follow market speculation about tight supplies of plastic raw materials in local markets, as long lines of trucks were loading and unloading around the plastic trade center in Zhangmutou township, Dongguan, in early March.

While there was temporary traffic congestion around the Zhangmutou center, the situation was not as severe as the reported supply disruption of plastic raw materials, Xu said.

The congestion at the Zhangmutou plastic trade center in early March was primarily due to sudden changes in market expectations, which led to concentrated pickups of plastic raw materials, she said.

"The traffic congestion was exacerbated by continuous rainy weather, temporarily increasing pressure on local warehousing and logistics turnover," Xu said.

By last week, local logistics and traffic at the Zhangmutou plastic raw material trade center had fully returned to normal, she said.

Zhangmutou brings together resources from more than 900 petrochemical plants in over 60 countries and regions, along with more than 3,000 new material production enterprises across China.

The supply chain system in the township covers more than 300 varieties and nearly 100,000 models of plastic materials.

With transaction volume accounting for nearly one-tenth of the country's total, the plastic price index in Zhangmutou has become a barometer for the national market.

In 2024, the transaction volume of plastic raw materials in Zhangmutou reached 15 million metric tons, with a transaction scale exceeding 100 billion yuan ($14.5 billion).

Additionally, high-end modified materials developed by local enterprises, such as low-smoke, halogen-free flame-retardant polypropylene, have captured more than 70 percent of the global market share.

Sudden changes in market expectations came shortly after joint attacks by the United States and Israel on Iran, according to Li Taoneng, sales manager at Dongguan Yunxin Plastic Raw Materials Co.

"My phone kept ringing as prices of plastic raw materials changed several times a day, and quotes couldn't keep up with the fluctuations," Li said.

The entire market was busy picking up materials, and it became a race about who could pay faster, which soon led to traffic jams in early March, he said.

"In this environment, merchants raised their quotes in line with market trends, and downstream customers worried that prices would be higher the next day if they didn't purchase immediately," he said.

Before the Spring Festival holiday, agents and distributors had already placed orders with petrochemical plants, and shipments were originally scheduled to arrive in Zhangmutou gradually after the holiday, according to Zheng Bin, a manager with plasway.com, an online plastic raw materials trading platform.

"While traders are worried about continued increases in crude oil and plastic prices, there has been a rush to place more upstream orders," Zheng said.

Downstream injection molding and product manufacturing factories already had post-holiday restocking and pickup needs. With added concerns about rising raw material prices, they have also been placing orders through traders.

"As a result, when arrivals, pickups and rush orders occur simultaneously, an unusual traffic jam emerged in Zhangmutou," Zheng said.

Market speculation in early March also hiked prices of plastic raw materials, with the price index in South China rising from 16,771 yuan per ton in late February to 19,817 yuan on March 9, according to plasway.com.