December 2025 | Market Update

How Market Softness, Supply Risks Affect You

From Chuck Hoop, Business Director, Star Plastics

Material Pricing and Supply

Polycarbonate
North America – The U.S. remains a net exporter, keeping domestic PC prices structurally above global averages. Sabic announced a 10 CPP increase effective Nov 1, and spot/contract adjustments are mixed as suppliers defend share but they will hold the line. Demand is soft in electronics and automotive; medical-grade demand is rising (durable/BPA-free needs). A key item to watch is flame-retardant additive tightness, such as the antimony trioxide (ATO) supply concentration in China (~80% of global output). This creates volatility/risk for PC (and ABS) while giving room to PCABSFR as more cost effective and a superior performing alternative. The October price for GP PC assessed flat; buyers are cautious and delaying buys in the stable/soft environment. Asia cost, insurance and freight from China main ports inched up ~$25 per metric ton to ~$1,435 per metric ton for GP and ~$1,400 per metric ton for optical media grades. Overall, PC is stable-to-soft near term, with medical-grade the notable bright spot; supply chain risk is concentrated in FR additives/ATO.

ABS
The market in North America has largely absorbed new tariffs with no broad price dislocation yet. Tariffs on South Korea/Taiwan imports are seen as sticky. China remains under negotiation from 30% to 20% in November. Demand remains slow, especially in appliances (2025 appliance unit outlook flat; inflation/tariffs push repair-over-replace behavior by consumers) and mobility (headwinds in vehicle demand and Novelis fire). Sabic announced a 10 CPP increase for November 1, and pre-tariff inventory and ample supply are limiting significant lift, but they are persistent. October’s price assessment was flat with push-pull of share-defense discounts vs. announced increases not fully adopted yet). Overall, ABS is sluggish globally, with tariffs a background variable in North America and import pressure plus weak demand dominating Europe.

Nylon 6 and 66
North America – Entering Q4, supply is stable and long for both nylon 6 and 66; buyers report comfortable lead times and supply availability. Production cash costs dropped in October as nylon 6 down 2 CPP and nylon 66 down 1 CPP; feedstocks have stabilized, so costs are expected to stay flat-to-slightly higher next month. Demand is soft, led by automotive weakness (light vehicle production is down roughly 6% QoQ/YoY. That’s important because ~65% of nylon 66 demand and a large share of nylon 6 demand is automotive linked. Packaging is also a key nylon 6 driver. October nylon 6 prices are around 148 CPP and nylon 66 at about 169 CPP, both down on weak demand and ample supply.

Asia (China-focused) – Nylon 6 dropped about RMB 300 per metric ton to roughly RMB 9,300 per metric ton; spreads vs. caprolactam/benzene are compressed and still weak. Nylon 66 fell RMB 200 per metric ton to ~RMB 14,700 per metric ton, continuing a long downtrend. The 66 market is structurally oversupplied due to rapid new HMDA and polymer capacity additions, pushing costs and prices lower with no clear near-term reversal. Overall, nylon is a buyers’ market everywhere—long supply, soft auto-linked demand, and heavy Asian capacity/exports keeping global pressure on pricing.

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A recent article in the Wall Street Journal, headlined: ‘Wary Consumers Still Sustain Retailers’
Heading into the holiday season, the U.S. consumer looks cautious. Government data (delayed by the shutdown) showed retail sales in September were only up 0.2% from August, indicating modest spending growth. At the same time, a key gauge of sentiment—the Conference Board’s consumer confidence index—fell in November, and the share of people saying business conditions are “good” dropped sharply. That points to households feeling more worried about the labor market, still sensitive to inflation, and increasingly focused on bargains.

Yet, major retailers like Walmart, Amazon, TJX, and several others (Kohl’s, Best Buy, Dick’s Sporting Goods, Burlington, Abercrombie & Fitch) reported better-than-expected results and raised guidance, especially those positioned around value, off-price, or compelling promotions. So the picture is: consumers are nervous and deal-hungry, but still spending selectively—especially where they perceive strong value.

At the same time, strong performance at off-price/value retailers suggests opportunity if your customers are supplying those channels—volumes there may hold up or grow, but with intense cost pressure. Practically, this environment argues for closer demand planning with customers, tight cost control, agility on product mix (supporting lower-cost or “good-enough” options alongside premium), and watching inventories carefully in case the consumer slowdown broadens after the holidays. Get the whole picture.

Why does it matter for a manufacturing company? This matters because it signals slower, more price-sensitive demand ahead rather than a clean “up” or “down” cycle.

• Tighten orders or delay programs if they’re worried about demand softness.
• Shift mix toward value and mid-tier products, which can pressure margins and change which materials/grades consumers want.
• Push harder on price, lead time, and flexibility, since they’re fighting for cautious, bargain-hunting consumers.

Call Star with your material needs to alleviate market pressure!

Waiting on the Fed
The chief economist of the National Association of Home Builders, Dr. Robert Dietz, published an article on the Fed and interest rates with their effect on housing. In summary: Markets are basically in “wait and see” mode as they watch how the Fed wraps up the year, especially with mixed signals from the economy. Job growth has slowed a lot, with 2025 averaging fewer new jobs per month than 2024, unemployment ticking up to 4.4%, and construction-related sectors like home building losing jobs, even as the latest report still showed some decent hiring.

The Fed has currently cut rates only twice in 2025 (September and October), with a higher chance of another cut in early 2026, though the case for more easing is building because short-term Treasury rates are already below the fed funds rate. At the same time, there’s growing discussions that the AI boom might be overhyped, which has helped cool the stock market a bit, while long-term interest rates remain relatively high and mortgage rates are still in the mid-6% range, keeping the spread between mortgages and Treasuries somewhat wide. In housing, builder sentiment has nudged up, and many builders are cutting prices, but affordability remains a big problem, especially for younger adults, more of whom are living with their parents again. Credit for residential construction is still tight, but if rates ease as expected and construction loan rates fall by around half a percentage point, that should help support at least a modest pickup in single-family home building in 2026. The full article is here.

AdvanSix cuts nylon production to manage inventory amid weak demand
On November 10, Plastics News reported that AdvanSix had a tough quarter for nylon: sales fell 16% to $79M, now about 21% of total sales. CEO Erin Kane says they’re deliberately dialing back production to keep inventory tight and protect cash flow in what looks like a “lower-for-longer” market. Utilization slipped approximately four points from Q2 to Q3. They also hit a snag in September—a brief power outage and small fire at the Chesterfield, VA nylon plant—which will impact Q4 earnings by $7–9 million from unabsorbed fixed costs. They experienced no injuries, no environmental issues, and operations are back up. Overall Q3 sales were $374 million (down 6% vs. 2024) with adjusted EBITDA at $24.7 million, about half of last year’s. Capex for the year is now pegged at $120–125M, trimmed by $30M thanks to “risk-based prioritization.” Big picture: they make caprolactam, nylon 6, and other intermediates across five U.S. sites, mostly selling domestically (tariffs help). Near term, the playbook is all about controllable levers—running rates, inventory, and product mix—to stay profitable through the cycle. Explore the full story here.

Logistics
One of the indicators we track at Star is transportation and since 1995, the Cass Freight Index® has been a trusted barometer of the North American freight market. They track freight trends and connect them to broader economic and supply chain indicators. The Index covers all major domestic freight modes and is built from $36 billion in annual freight spend processed by Cass on behalf of hundreds of large shippers. These shippers span a wide range of industries — consumer packaged goods, food, automotive, chemical, medical/pharma, OEM, retail, and heavy equipment—this diversity of participating shippers and the scale of underlying data provide a statistically robust view of North American shipping activity and its role in the overall economy. This past month’s report showed that the volumes of shipments is down 7.8% YoY and down 4.3% MoM with much of the decline in LTL volumes. The TL moves are up 1.1% MoM and 3.0% YoY. They attribute this to a slow economy; the current look sees the ‘goods’ demand as soft especially as compared to the 2021 boom and I’m sorry to say the trend continues to be down. Services are what seem to be carrying the economy right now.

In addition, coming from Freightos, Cyprus Shipping and others, container costs – imports, specifically from China, are back down to the levels of 2023, with import containers at just about $2,300.

The housing market
Housingwire reported in early November that mortgage rates have continued their downward trend nearing 6% after a yearlong high of over 7.2%. Several sources are forecasting rates to continue their downward trend to the mid to upper 5% range on a 30-year mortgage. The question becomes, is this enough to get buyers back into the market where the inventory of existing homes is increasing? The National Association of Home Builders says ‘yes’ based on their website. Explore the details.

Moving beyond the interest rates, on the housing inventory front – According to National Association of Realtors, active listings (existing homes for sale) rose about 15% year-over-year from October 2024 to October 2025 and that existing home sales rose 1.5 % in September 2025 and note that falling mortgage rates are lifting home sales.

The National Association of Home Builders publishes its Housing Market Index (HMI) and shows that builder confidence improved in October 2025: current sales conditions rose, future sales expectations jumped to 54 (above breakeven), though buyer-traffic remains low (index at 25). The inventory side seems to be loosening; buyers are getting more choices. Meanwhile, builders are cautiously optimistic but are still seeing weak traffic. This suggests the supply/demand balance is shifting, but not all the way toward a true buyer’s market yet.

Together, these factors lead to a market where inventory is increasing, which tends to shift bargaining power toward buyers, and affordability is gradually improving.

Novelis Aluminum plant fire update
The Novelis website continues to update their status from the September 16 fire, with a focus on getting the Oswego, NY facility back up and running. This plant supplies 40% of the North American aluminum sheet to the automotive market. When the fire first occurred, the report from Novelis was that the plant would be back up after the first of the year. At the end of October, reports had expectations that the plant would open up for production by the end of December. Ford, General Motors, Toyota, and Stellantis are key ‘local’ customers of the facility and each reported supply challenges due to the fire. This is the first positive news to assist the mobility market in a while: novelis.com/oswego/.

That was then…. This is now
On October 20th, they had another fire, a five alarm , as they were starting back up. Multiple sources reported that: Novelis says the plant was evacuated safely and there were no injuries to employees, contractors, or first responders. Local officials reported a five-alarm fire with 80–100 firefighters from 20+ departments responding. The blaze was brought under control the same day, with crews remaining on site to monitor. This Oswego facility supplies roughly 60% of the aluminum sheet used by U.S. automakers, and Ford is the largest customer (aluminum bodies for F-150/F-150 Super Duty). Novelis is also using alternate supply sources from its broader network to limit the disruption.

A crisis at chipmaker Nexperia sent automakers scrambling
Nexperia is basically in a tug-of-war with its China unit and owner Wingtech, and the auto industry is stuck in the middle. The Dutch chip maker says it still isn’t getting reliable responses or shipments from its China operations, even though some exports have resumed after the Dutch government temporarily backed off from its earlier move to seize more control of the company—something it did under pressure from the U.S., using economic security and tech know-how as the basis for the move. Beijing hit back with export controls, which disrupted chip flows that are crucial for car production and industrial automation. Wingtech is blaming the Dutch government for the chaos and has even appealed a court decision in the Netherlands, calling it part of a geopolitical power struggle. For now, automakers are warning of possible production stoppages, and analysts say that while the short-term hit might be modest, this whole episode could push the auto industry to rethink how much it relies on Chinese chip supply chains in the long run.

The standoff sits inside the wider U.S.–China tech rivalry, leaving Europe caught between Washington’s export-control campaign—after Wingtech and then its subsidiaries were added to the U.S. “entity list”—and Beijing’s retaliatory move to block chip exports from Nexperia’s Dongguan plant. Although a Trump-Xi trade truce signaled that China would ease the ban, internal frictions persisted as Nexperia’s Chinese unit and Dutch headquarters accused each other of withholding wafers and ignoring lawful instructions, raising quality and delivery concerns. Automakers warn that replacing Nexperia’s high-volume parts quickly is extremely difficult, with Ford, GM, Nissan, Mercedes-Benz and others preparing for potential fourth-quarter losses and drawing down stockpiles. Officials on both sides now report encouraging progress: China is simplifying export procedures, agreeing to consultations with Dutch representatives, and Honda says shipments have restarted and expects to resume HR-V production during the week of Nov. 21. Learn more.

Tesla Wants Its American Cars to Be Built Without Any Chinese Parts
In a recent edition of the Wall Street Journal, Tesla is telling its suppliers that any cars built in the U.S. can’t use China-made parts anymore, and it’s already started swapping those components out for ones made in other countries. The company has been nudging Chinese suppliers to set up operations in places like Mexico and Southeast Asia, a trend that started after COVID supply disruptions and picked up speed as U.S. tariffs on Chinese goods increased. All of this is happening against a backdrop of rising tensions between the U.S. and China, with ongoing tariff uncertainty that’s made it harder for Tesla to plan pricing. The situation with Nexperia chips and China’s export controls on key materials has only reinforced Tesla’s push to remove China from its U.S. supply chain.

China is still a powerhouse for auto parts, and especially things like batteries, which are cheap there, thanks to huge scale and lower costs. One big headache for Tesla has been replacing Chinese-made Lithium Iron Phosphate (LFP) batteries from Contemporary Amperex Technology Co., Ltd., in U.S. cars, especially since those batteries started running into tariff issues and became ineligible for certain tax credits. Tesla has stopped using those China-made LFP packs in U.S. vehicles and is now working on building LFP batteries and energy-storage products in the U.S., including a facility in Nevada that’s expected to start up in early 2026. The company’s finance chief has been upfront that building a non-China battery and parts supply chain will take time—but that’s clearly the direction Tesla (and a lot of other companies) are moving. Get all the details here.
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