September 2025 | Market Update

Rising Resin Prices, Tariff Shifts, Rail Merger, and Global Trade Uncertainty

From Chuck Hoop, Business Director, Star Plastics

Market Pricing Movement

• Dow Packaging and Specialty Plastics announced on August15, an increase of 5 CPP for all HD, LD and LLDPE materials for September 1^st. This is in addition to the increase announced August 1. Read the full report.
• American Styrenics (AMSTY) announced a 5 CPP increase on styrene right at the end of July for implementation for August 1, just 5 days after publishing the news. See the full report here.
• LyondellBasell announced a 5 CPP hike for PE effective August 1. This is in addition to the 6 CPP increase implemented on July 1. Like AMSTY, they announced on July 28 for implementation on August 1. Read more.
• LG Chemical came in with a 15% tariff-related increase on ABS products on August 6, which was implemented when the tariff pause was lifted on August 1.
• Lotte announced a 45 CPP increase on FR ABS in mid-August, driven solely by rising antimony costs. This adjustment was not related to tariffs on materials moving from Korea to North America.

Court again strikes down Trump tariffs in case brought by pipe maker, other firms

As reported in Plastics News, federal appeals court struck down the Trump Administration’s “Liberation Day” tariffs, ruling they exceeded presidential authority under the International Emergency Economic Powers Act (IEEPA). In a 7–4 decision, the U.S. Court of Appeals for the Federal Circuit upheld a lower court ruling that the tariffs were unconstitutional. The lawsuit was filed by a group of small businesses, led by plastics manufacturer Genova Pipe, and represented by the Liberty Justice Center. The court called the tariffs “unbounded” in scope, amount, and duration, finding that only Congress can authorize such sweeping trade actions. Plaintiffs argued the tariffs inflated costs and disrupted operations, while 18 amicus briefs highlighted widespread economic harm.

The ruling does not affect Trump’s earlier Section 232 tariffs on steel, aluminum, and autos or Section 301 tariffs on China from his first term. Trump denounced the decision as partisan and insisted the tariffs remain in place. The case may proceed to the Supreme Court.

Trump Extends China Tariffs to November

On the demand side, no significant month-over-month changes were reported. However, sectors like automotive and construction are under pressure with U.S. light vehicle production, which is down 5% year-to-date and expected to fall similarly through 2026. The construction sector is forecast to grow by only 0.7% this year, compared to 5.2% growth in 2024. Tariffs on metals (aluminum and steel) have worsened conditions for these industries. Meanwhile, we haven’t seen any significant disruptions in PC production or the supply chain that were reported this month.

In logistics, Union Pacific and Norfolk Southern reach $85 billion merger deal

Union Pacific (UP) and Norfolk Southern (NS) have announced a historic merger that will create the first U.S. transcontinental railroad, operating 52,215 miles of track across 43 states and serving around 100 ports. The $320-per-share stock and cash deal, valuing the combined enterprise at over $250 billion, is expected to generate $2.75 billion in annual synergies within three years. The merged company will improve freight efficiency by reducing transit times, expanding intermodal services, and eliminating interchange delays—ultimately strengthening domestic manufacturing and shifting more freight from highways to rail.

The merger has unanimous board approval and aims to close by early 2027, pending Surface Transportation Board (STB) review and shareholder consent. The combined company will be based in Omaha, with Atlanta remaining a key hub. Union Pacific CEO Jim Vena will lead the new railroad, which both companies say aligns with Abraham Lincoln’s original vision of a transcontinental rail system. Industry leaders and observers emphasize the potential for increased competition, better service, and stronger supply chains—though scrutiny under modern merger rules is expected to be rigorous. Read more here.

Foxconn Looks to Build AI Servers at Former Lordstown EV Factory

Foxconn, the Taiwanese manufacturing giant best known for assembling iPhones, plans to repurpose the former Lordstown electric-truck factory in Ohio into a hub for cloud computing hardware used in AI applications. This shift reflects the broader shift in U.S. industrial policy under President Trump, who has ended EV subsidies while aggressively promoting domestic manufacturing of AI-related infrastructure such as servers, chips, and data centers. The Lordstown site—originally a GM car factory—had briefly been used by Lordstown Motors to produce electric trucks before the startup went bankrupt in 2023. Foxconn had partnered with the firm before acquiring the plant outright and selling the property for $375 million, though it will remain active at the site to pursue new ventures in computing.

Foxconn’s transition to AI server manufacturing comes as the company’s server business gains momentum, now making up over a third of its revenue. The firm operates in six U.S. states and is working with tech leaders like Apple and Nvidia to build AI-focused facilities domestically. Trump, has now shifted policy focus toward AI, aiming to fast-track infrastructure development and incentivize domestic production through tariffs and deregulation. According to McKinsey, capital investment in U.S.-based AI data centers could surpass $5 trillion by 2030, signaling a massive realignment in American manufacturing priorities. You can read the full article here.

Freight market’s ‘holding pattern’ continues in July

The logistics industry continued its expansion in July, although the transportation sector remains stagnant, with the Logistics Managers’ Index (LMI) showing transportation capacity at 52.6—indicating slight growth. However, the ongoing expansion in capacity suggests that a significant rebound in the freight cycle is unlikely from the supply side alone. Transportation utilization (59.5) and pricing (63) both rose, with pricing consistently outpacing capacity throughout 2025, implying a slow and steady recovery. Truckload carriers have adjusted operations by downsizing fleets to improve efficiency, particularly among supply chain players like wholesalers who showed strong performance versus flat activity from retailers. Forward-looking sentiment is optimistic, with pricing expectations at 75.5 over the next 12 months.

Inventory trends drove much of the supply chain activity in July. Smaller firms, especially in the middle mile (e.g., distributors and logistics providers), reported rapid inventory expansion (64.8), while retailers experienced inventory contraction (47.6), likely due to fluctuating tariffs. Overall inventory levels declined slightly, but costs remained high at 71.9, though down from June. Warehouse capacity rose back into expansion (51.1), while utilization dipped and pricing stayed robust at 68.3. Smaller firms experienced tighter warehouse conditions due to growing inventory. Real estate firm Prologis noted increasing leasing activity from large tenants, hinting at rising market rents. The LMI, compiled by several universities with support from the Council of Supply Chain Management Professionals, recorded an overall score of 59.2, slightly below the historical average.

Also, be forewarned that Transshipment Enforcement is heightened right now. Sometimes called ‘the gray trade’ U.S. Customs and Border Protection has issued a warning to importers: it will closely monitor for transshipment practices intended to circumvent higher tariffs. Goods routed through a lower-tariff country without substantial transformation will be subject to a 40% duty rate retroactively, along with possible fines. Learn more here.

President Trump’s Tariffs Won’t Solve U.S. Chip-Making Dilemma

President Trump’s proposed 100% tariff on chips and semiconductors aims to encourage U.S. manufacturing by exempting companies that commit to building domestically, according to a Wall Street Journal report. However, major players like TSMC, Samsung, and Intel are already investing heavily in U.S. facilities, due to subsidies from the previous administration, and are likely to qualify for exemptions without significantly expanding beyond existing plans. The high cost of U.S. manufacturing—TSMC projects a 2–3 percentage point hit to gross margins—limits incentives to ramp up advanced chip production domestically. Most cutting-edge manufacturing still occurs overseas, as U.S. facilities, such as TSMC’s Arizona plant, are producing older-generation chips compared to their Taiwan operations. Meanwhile, non-chip-making tech giants like Apple have secured exemptions through large-scale U.S. investment pledges, often tied to projects already underway, which do not necessarily boost domestic advanced chip capacity.

While tariffs could push electronics companies toward more U.S.-based operations, their effect on advanced semiconductor manufacturing seems to be limited. The reporters in this article seem to be saying that the motivations aren’t getting the US the intended result. This includes Chips Act subsidies, tax credits, supply-chain resilience, and geopolitical concerns—such as tensions with China—than by tariff policy itself. U.S. chip production will likely grow, but primarily due to strategic and security considerations, not the tariff regime. Ultimately, the higher costs associated with both tariffs and U.S.-based manufacturing will be shared by consumers and businesses across the electronics supply chain.

Inflation report out for July from NBC News, Reuters and the US Bureau of Labor Statistics reported

U.S. consumer inflation held steady at 2.7% year-over-year in July, below expectations, as food and energy prices remained soft. However, core inflation, excluding these volatile categories, rose to 3.1%, the highest since February, signaling persistent upward price pressures. Economists are divided on the impact of President Trump’s tariffs, with some warning of a potential shift toward stagflation which is slowing job growth alongside rising prices. While certain goods like furniture saw price gains tied to tariffs, other categories such as apparel and appliances eased. Analysts warn inflation could rise further once pre-tariff inventories are depleted, and the Federal Reserve is now more likely to consider rate cuts in September, even as higher tariffs on Chinese imports remain in place.

The inflation report comes amid turmoil at the Bureau of Labor Statistics following Trump’s firing of its commissioner, with concerns over data integrity. Economists estimate consumers have so far experiencd 22% of tariff costs, a figure that could reach 67% by year’s end, potentially pushing the Fed’s preferred inflation measure well above its 2% target. The central bank faces a policy dilemma—rate cuts could risk fueling inflation in a stagflation environment, yet keeping rates high may slow the economy further. While some Fed officials downplay tariff effects as temporary, Chair Jerome Powell remains cautious, noting inflationary pressures could persist for up to 18 months as trade duties fully filter through the economy. The NBC version can be seen here.

Plastics treaty talks collapse; next steps unclear

Plastics News Assistant Managing Editor Steve Toloken wrote an article at the end of the global plastics treaty talks in Geneva, which ended Aug. 15, without agreement. The nations failed to bridge divides over production limits, chemical health risks, and how to pay for the agreement. A coalition of more than 100 countries, including the EU, Canada, Japan, and many from Africa and Latin America, pushed for a treaty tackling unsustainable production and chemical toxicity. Oil-producing nations like the U.S., Russia, and India resisted, focusing instead on recycling and waste management in. Despite two last-minute draft proposals, neither side could compromise, leaving diplomats frustrated and environmental groups urging an alternative path, such as moving to a voting system rather than consensus.

Industry groups described the collapse as a missed opportunity but highlighted progress on recycling and circular economy goals, urging negotiators to build on common ground versus contentious production limits. Environmental coalitions argued that stronger measures remain necessary, with over 100 countries supporting phaseouts, design standards, and chemical regulations. The United Nations said the talks would resume at an unspecified future date, but observers warned the three-year negotiation window may have been too short and called for like-minded nations to move forward with a “treaty of the willing” if consensus remains blocked. Access the article here.

Panic? What panic? Port of Los Angeles sees record 1 million containers in July

Sonar magazine, a transportation publication, put numbers to expectations on imports. The Port of Los Angeles recorded its busiest month ever in July 2025, handling 1.02 million twenty-foot equivalent units (TEUs), up 8.5% from last year and surpassing its previous record set in July 2024. The surge was fueled by shippers frontloading cargo to avoid potential U.S. tariffs under the Trump administration’s shifting trade policies. Executive Director Gene Seroka credited the smooth handling of record volumes to the coordinated efforts of longshore workers, terminal operators, rail, and trucking partners. Loaded container imports rose to 543,728 TEUs, while exports climbed 6% to 121,507 TEUs. The port also moved 354,602 empty containers, up 10% from last year, signaling strong future import activity. Year-to-date, Los Angeles has processed nearly 6 million TEUs, 5% higher than the same period in 2024, underscoring its central role in navigating U.S.-China tariff tensions. Check out the article. This means there will be inventory of materials for the near term before the effect of tariffs on goods may be seen.

Auto suppliers anticipate rough conditions in next six months

Automotive News had an article on the automotive industry on July 18, and a new survey which gauges the state of the industry. The article concluded that auto suppliers are significantly more pessimistic about their near-term business outlook than automakers and dealers, according to Automotive News’ first Auto Industry Confidence Index. This is a survey that will occur quarterly and the first survey revealed suppliers scored 51.3 on the 100-point scale, well below automakers (57.6) and dealers (55.5). Their views on current performance were also weaker, with only 47% rating conditions as “excellent” or “good,” compared with 56% of dealers and 61% of automakers. Looking ahead, supplier sentiment drops further: their six-month outlook rating came in at 41.9, compared with the industry average of 46.9, making suppliers the only group where more respondents expect conditions to worsen than improve.

The pessimism stems from a mix of trade policy uncertainty, tariffs, electrification shifts, and stalled investment decisions. Parts makers, already strained by years of thinner profit margins from the pandemic, inflation, and supply shortages, now face frozen product plans and unclear signals from automakers. Many suppliers report being in “wait-and-see mode” as they struggle to decide which parts to produce and where to build them. The uncertainty has stalled growth initiatives, with suppliers anticipating declines in customer demand, supply chain reliability, regulatory burdens, labor costs, and pricing power in the months ahead. Explore the full story here.

Sabic is going through an update to their SAP system. 

We received information this month that Sabic is upgrading to SAP S/4HANA to enhance operations and customer service. During this transition, they are asking for orders ahead of the five-day shut down. See the full letter here. I wonder what issues they may have in this upgrade.

July 2025 | Market Update

Plastics News reported August 26 that the Trump administration has expanded its 50% steel and aluminum tariffs to cover imported plastic injection, blow, and compression molds, as well as other mold components. The move is intended to strengthen U.S. steel and aluminum industries and prevent circumvention of existing duties. U.S. mold makers, represented by the American Mold Builders Association (AMBA), welcomed the decision as protection against unfair trade practices and a boost to domestic tool shops.

However, many plastics processors and large manufacturers, including Amcor, LG Electronics, Polaris, and GE Appliances, strongly opposed the tariffs, warning they will raise costs, slow production, and hurt competitiveness. Others also question the national security justification for applying tariffs to molds, with some suggesting the move could face legal challenges. Industry experts note that while U.S. mold shops may see short-term gains, limited capacity, labor shortages, and longer lead times could prevent significant long-term benefits. Canadian mold makers are expected to be especially hard hit, and downstream manufacturers face higher costs as tariffs stack on top of existing duties, particularly on imports from China. Explore the full story here.Container shipping rates on key Asia–U.S. routes are falling as weakening import demand and tariff tensions driven by President Trump’s policies take a toll on global trade. Tariffs are now significantly impacting consumer prices and shipping costs, with U.S. inflation rising 2.7% in June. Importers, who once managed to avoid higher costs by frontloading goods amid past global disruptions, are losing that advantage. Meanwhile, the European Union has threatened retaliatory tariffs on $84 billion in U.S. goods but is delaying implementation to pursue a negotiated resolution as the U.S. eyes a 25% tariff hike by August 1.