The plastics industry remains in flux as both material production and logistics industry attempt to catch up to normal levels of availability and demand. Below are highlights of the changes we’ve seen in materials and logistics, as well as other global aspects affecting the market.
Materials prices are still rising, with availability of supply still below the amount in demand. Feedstocks purchased last week of the same material are up 15 cpp in one week. Secondary markets have been moving up in early April with increases in cost being realized, with supply continuing to be low.
It seems that Ineos and Sabic are both sold out through 2021 on ABS, and PC is right behind it.
In recent months, logistics have become just as turbulent as material pricing and availability has been – both transportation and packaging suppliers are struggling to meet the continued demand in the plastics industry (and many others!).
Packaging increases have occurred across the board – skids, boxes, lids, and liners alike. Suppliers are forecasting a normalization in June, but supplies are tight and will remain that way into May.
Overall, trucking availability remains limited, with load to driver ratios at about 6:1. Fuel costs continue to rise, also impacting trucking costs immediately on inbound and outbound costs. Capacity of drivers and trucks is expected to tighten further with the prioritization of perishable food products as produce season approaches.
Automotive continues to be stalled. The shortage we’ve seen in the secondary markets have caused others to move to higher valued feedstocks, (where Star buys), causing additional shortages.
Towards the end of March, Asian PC prices saw more increases, as Sabic announced a $.55 cpp increase (effective April 1). In terms of supplies, Asian BPA saw a shortage of 50% during the month of April and into May for planned shutdowns.
This is not a traditional market we are experiencing, or one that the plastics industry has ever seen before. As supplies come back up from a deficit, prices are still moving up at the same time. As we continue to move forward through the market, we’re doing our best to be proactive around these unusual circumstances and mitigate any impact they may have on our customers.
You are our valued partner, and Star Plastics appreciates and values your business. Please email us at Sales@StarPlastics.com or contact your local Star Plastics representative with questions.