Higher oil prices: a stress test - and a catalyst

But periods like these also tend to separate what is optional from what is necessary.

When raw material costs rise, inefficiencies get amplified. Suddenly, yield losses, material degradation, and limited recyclability are no longer minor issues - they directly impact margins. That’s when solutions that improve performance or extend material life start to move up the priority list.

The plastics industry is, of course, heavily exposed due to its oil dependency. But my base view is that these kinds of “stress events” are exactly what drive real demand for solutions like Reactive Recycling. It’s the classic boiling frog dynamic - change happens slowly, until suddenly it doesn’t.

For companies like Nexam, this creates an interesting setup. Additives that enhance material properties or enable higher-quality recycling become more economically relevant as the cost of virgin material increases. In recycling specifically, higher oil prices can improve the relative competitiveness of recycled content - especially when combined with performance-enhancing additives.

There are also second-order effects worth noting:

• OEMs and converters may accelerate qualification of alternative materials or processes

Sustainability targets become easier to justify when they align with cost savings
Pressure on supply chains can open doors for new formulations and partnerships

• Of course, this is not a one-way street. If higher oil prices coincide with weaker macro demand, volumes can still come under pressure in the short term.

• But structurally, environments like this tend to accelerate adoption curves - not through hype, but through necessity.

Not explosive - but directionally supportive.