At Star, we feel compelled to continue updating you on the market conditions for ABS, PC and related products and services globally. There are non-plastics related events that affect us all directly or indirectly that have changed the supply of the market over the past month.
We put together a synopsis of what we saw in the market in January.
In late December and again in early January, Sabic announced lead time increases from 6 to 12 to up to an unprecedented 14-weeks on many of their key product lines—not including transit time from their facility to yours. Late January saw an additional increase to 18-weeks on Lexan® and Cycoloy ®. This is the first time we have seen Sabic lead times this far out and longer than imports!
Covestro announced on 01.11.21 an increase of 10 cpp for PC products effective 01.22.21, with just 11-day notice! Bayblend FR products were increased 14 cpp, and they also extended lead-times to 10 weeks.
A major NA appliance supplier has a ‘never seen before’ backlog of units, meaning this is a long-term recovery to make those units even if orders stopped today (but we keep buying them!). Each unit contains a lot of plastic that has to be produced, shipped, molded and sold.
Container shipments, globally, are causing the cost increases that are taking the market by storm. While containers are available, their physical locations are where consumption occurs and not the production. Next, there are ‘mafia’ tactics of holding containers for the highest bidder. Paying for the privilege of getting the container and then the actual freight is assessed. Certain global lanes are seeing 4 fold year-over-year cost increases.
We are seeing more and more compounded product producers issuing formal price increases in today’s market. January increases have been from 6 cpp (who are on their 3rd increase since late November) to 10 cpp on 2nd announcements since December. These increases are on ABS and PC alike.
After the Chinese New Year in Asia, we expect…
Coming out of the Chinese New Year in Asia (they come back to work around Feb 22), we expect that it will come back strong on demand, short on supply, and higher prices. We have heard that companies are offering up to threefold salary for employees to stay at work and not go home for CNY.
To reiterate, we will take care of base business customers first and are not taking on new customers unless we know we can support our base business! You are our valued partner, and Star Plastics appreciates and values your business. Please email us at Sales@StarPlastics.com or your local Star Plastics representative with questions.