Processors hunt for resin as shortages continue
Chevron Phillips polyethylene plant in Old Ocean, Texas.
Resin shortages are affecting North American processors as materials makers look to recover from the February ice storm that hit the Gulf Coast.
Most resin makers have warned customers and placed force majeure sales limits because of their inability to produce at full rates. Delivery times also have been extended in many cases. Pressure for higher prices on most commodity resins is expected to continue in March and April.
The shortages have negatively impacted our delivery performance with customers, said Charles Sholtis, CEO of injection molder Plastic Molding Technology Inc. in El Paso, Texas. We are working with our customers and suppliers to come up with alternative material solutions, since it appears to be a long-term issue with tight supply and high demand.
Texas freeze heats up resin prices in February
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Tight supplies and the Texas ice storm sent North American prices for most commodity resins up in February, including a monumental price increase for polypropylene.
Beginning Feb. 14, cold weather spread across Texas, including its Gulf Coast, where much U.S. resin production is located. Plants were closed in advance of the cold snap, but some operations were damaged as freezing temperatures caused pipes to expand.
As of Feb. 25, many commodity resin makers on the coast still were assessing their ability to restart production. Commodity resin markets especially polyethylene, polypropylene and PVC already were tight before the cold snap and have been further tightened by the outages.
Price hikes bring resin buyers a less than happy new year in January
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The resin price hikes that complicated the end of 2020 kept on rolling right into the first month of 2021.
North American polypropylene prices absorbed the heaviest blow, surging an average of 13 cents per pound in January, after jumping 14 cents in December. That two-month total of 27 cents in increases has led some processors to issue price surcharges on PP-finished products.
And more PP price hikes could be on the way, as prices for polymer-grade propylene monomer feedstock continue to rise, recently topping 80 cents per pound. Regional PP prices now are up 46.5 cents per pound since May.
Resin prices continue to hammer processors in 2021
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Resin buyers hoping to ease into 2021 had a rude awakening, as a series of price hikes have taken hold in North American markets for polypropylene and other commodity materials.
PP prices have surged an average of 13 cents per pound since Jan. 1, after jumping 14 cents in December. The eye-popping two-month total of 27 cents in increases has led some processors to issue price surcharges on PP-finished products.
Regional prices for polyethylene are up an average of 5 cents per pound since Jan. 1, with PVC prices up 4 cents and prices for solid polystyrene up 5 cents, according to buyers and market sources contacted recently by
Total s LaPorte, Texas, site.
LA PORTE, Texas No one was injured in a Dec. 15 fire at a polypropylene resin unit operated by Total Petrochemicals in La Porte, Texas. But the incident is further tightening supplies of PP in North America.
Regional PP prices soared 14 cents per pound in December and now are up 33.5 cents per pound since May. Sources said another double-digit price hike could take place in January. The
Plastics News resin pricing chart will be updated Jan. 7. The fire was extinguished within a few minutes, a company spokeswoman said in a Jan. 5 email to
Plastics News. All personnel were accounted for and there were no injuries.