Flexible Packaging Europe (FPE) is reporting significant price increases for nearly all key raw materials for flexible packaging in the second quarter of 2026. The association cites geopolitical tensions, rising energy prices, and uncertainties in global supply chains as the main causes. At the same time, FPE sees initial signs of market stabilisation later in the year.
The raw material prices for flexible packaging materials rose significantly in the second quarter of 2026. According to the FPE Raw Material Price Index, all substrates considered recorded price increases compared to the previous quarter. The rise was particularly sharp for BOPP film (20 micrometres), the price of which nearly doubled (+97 percent). PET film (12 micrometres) became around 40 percent more expensive, and BOPA film (15 micrometres) by 21 percent. Aluminium foil (+12 percent), single-coated paper (+5 percent), HDPE (+38 percent), and LDPE (+31 percent) also saw significant increases. Compared to the second quarter of 2025, all observed materials were also at a higher price level.
Geopolitical risks are driving prices up
The most important causes for the development cited by FPE are geopolitical tensions and the resulting disruptions in commodity markets. Alexander Tkachenko from Wood Mackenzie explains the situation: „BOPET prices increased by an average of €0.55 per kilogram over the course of the quarter. The reason for this was rising oil prices and concerns about potential supply shortages of PTA and MEG. BOPP prices nearly doubled during the same period. The main reason for this was the very tight supply of PP resin in Europe, as inventories were already low before the conflict began. BOPA film prices also rose significantly, supported by higher costs for PA6, PA66, and Caprolactam. Aluminium foil became more expensive by €0.62 per kilogram this quarter due to higher LME prices and significantly increased warehousing premiums. Paper prices increased by €0.06 per kilogram. While paper is less directly dependent on petrochemical markets, persistently high oil and energy prices could lead to further cost increases with a delay in the winter.“
According to FPE, the European polyethylene market was also significantly influenced by the geopolitical situation. The conflict with Iran, as well as concerns about supply bottlenecks, led to strong market movements, according to the association.
„The European polyethylene market experienced significant volatility in the second quarter of 2026. Triggered by the Iran crisis and the prospect of a supply shock in a market already characterised by low inventories, prices, after remaining at a comparatively low level from the second half of 2025 until February 2026, rose sharply in March. This trend continued through April and May as buyers prioritised material availability. Supply remained tight due to production outages in the Middle East and the need for other international suppliers to reorient their trade flows. Although European production gradually increased, demand continued to outstrip available supply. Prices stabilised in May as buyers, having restocked their inventories, focused more on affordability. Concurrently, prices in Asia were already declining. More competitive offers, particularly from China, strengthened buyers“ negotiating position. From the second half of May, spot market prices began to fall. This sparked concerns about inventory value erosion and dampened purchasing activity. Although spot prices continued to ease in June, they remained above pre-crisis levels. The prospect of a potential peace deal between the US and Iran is already weighing on crude oil and commodity prices. With the reopening of the Strait of Hormuz, supply bottlenecks are expected to ease, and supply in Europe should normalise. Historical experience and statistical correlations indicate that lower feedstock costs typically lead to declining polyethylene prices – provided no new supply bottlenecks emerge.“
Kaushik Mitra of Chemical Market Analytics by Opis
FPE expects stabilisation in the second half of the year
According to the assessment by Flexible Packaging Europe, recent drops in spot prices for polyethylene, along with a potential easing of the geopolitical situation, suggest a market stabilisation in the second half of the year. Guido Aufdemkamp, Executive Director of FPE, summarised the development: „The second quarter of 2026 was characterised by exceptionally strong price increases for almost all key packaging substrates. This was primarily due to geopolitical supply risks, rising energy and raw material costs, as well as considerable uncertainties in global supply chains. However, European flexible packaging manufacturers were generally able to deliver the requested volumes and will continue to do so. Overall, we are cautiously optimistic about further market developments this year – provided the geopolitical situation stabilises. However, the industry is concerned about private consumption, which could come under pressure due to expected food inflation.“
Source: Flexible Packaging Europe (FPE)
