Aug 30, 2017 | Uncategorized
First and foremost, we’d like to express our heartfelt care and concern for those affected by Hurricane Harvey. We’re thinking about everyone involved and continue to hope for a quick recovery.
In addition to the people affected by Hurricane Harvey, many resin manufacturers, as well as businesses that rely on resin, have also been affected. According to The Plastics Exchange:
Ahead of Harvey’s landfall, petrochemical complexes began to take precautionary matters by shutting down numerous facilities including crackers, refineries, resin reactors, as well as logistics related shipping channels, ports, warehouses, railways and roads, which together, will absolutely impact resin supply – the full magnitude of which cannot be determined as the storm system remains active. … A series of force majeure notices have since been issued by resin producers, citing plant shutdowns and logistics constraints.
Despite this supply disruption, we can report that our own supply shouldn’t be affected.
As we mentioned in a blog post in June, we purchase our resin supply well in advance of when we’ll actually need it and purchase from multiple sources. This gives us a nice buffer to work with when disruptions occur.
As for resin pricing changes, The Plastics Exchange also noted that “the major energy markets all moved lower and we expect heightened volatility as the hurricane related market unfolds.” To that point, a $.03/lb increase for August had been nominated before Hurricane Harvey struck. At the time it didn’t appear it would stick, but now, with so many shutdowns along the Gulf, it seems more likely to go through.
There are also rumblings that producers now want to institute an additional $.04/lb increase for September. It’s still too early to tell if that increase will hold, but if resin supplies continue to be impacted long term, it won’t be hard to imagine it going through. We’ll keep you updated on any developments as they come through.
If you have any questions or comments about this update or anything else at all, please send us an email or call us at (800) 272-2634. Thank you for your continued business, and we look forward to serving you.
Jun 20, 2017 | Uncategorized
One question we receive frequently has to do with how explosions or fires at resin manufacturers affect our supply or pricing.
The answer is they usually don’t.
We buy our resin supply well in advance of when we’ll actually need it, which means we’re always one step ahead of any hypothetical disruptions that might occur. This doesn’t mean we’ll never encounter a situation where we’ll need to replenish our supply at the exact same time a supplier experiences a disruptive event, but it gives us a nice buffer to ride it out or make other plans in case something unforeseen happens.
Having said that, what would happen if we did need to replenish our supply at the same time one of our suppliers had an on-site explosion? We buy our resin from multiple resin manufacturers—manufacturers we’ve chosen carefully and have spent years cultivating trusted relationships with—so if an issue arises with one in particular, we can usually count on our other suppliers to work with us to make sure we get the resin we need to fulfill our customers’ orders on time and without interruption.
As you can see, planning ahead, both by ordering in advance as well as creating trust-based relationships with the best suppliers around, is essential to making sure our customers receive their orders when they need them. We believe that’s the type of business model that sets us apart from our competition.
May 10, 2017 | Uncategorized
It’s been a while since we last posted about PE resin pricing and our lead times, so we thought it was time to pass along an update.
The first few months of 2017 saw suppliers push through a number of resin pricing increases, for a total increase of 8 cents per pound. Over the last few weeks, however, PE resin pricing has been relatively stable. The Plastics Exchange reported in their most recent update that “although producers are again seeking to implement the final $.03/lb price increase that is still on the table, based on market conditions, it now seems unlikely.” After the many increases during the first quarter of the year, this is welcome news.
As for current lead times, we’re still meeting over 99% of our scheduled due dates. Production schedules are back within our historical norms and we are working hard to keep them that way for you. As always, whenever you can project your needs out a little ways it is very helpful. We want to meet 100% of our lead times all the time.
If you have any questions or comments about this update, please send us an email. Thank you for your continued business, and we look forward to serving you.
Jan 24, 2017 | Uncategorized
We’ve been doing blown film extruding for about 20 years now, and in the beginning we made a decision about resins from which we have not deviated over the years. We prefer to only run certified prime resins in our process. Here’s why:
If you’re familiar with polyethylene, you probably know there are many grades of material. There are also many off-grade materials available in the marketplace. Sometimes the only thing that makes resin off grade is a very slight deviation from the standards set by the resin producers and everything is fine. Other times, however, the deviations are not so slight. These materials often show up in the marketplace at deeply discounted prices. While the lower prices might be tempting to some, those resins may have, for example, lower standards for melt indexes, clarity, and haze, which can result in finished products that are inferior in various ways. They can also result in bags with weak seals, weak film strength, variations in appearance, and other undesirable performance and aesthetic issues. In addition, different grades will process very differently in our manufacturing. By consistently using the same high-quality resins, we are able to produce the consistent results that we and our customers expect.
Chasing low-priced, off-grade materials can do more harm than good, and we’re as still confident as we were 20 years ago that using only certified prime resins is the best option for us and our customers.
Jan 11, 2017 | Uncategorized
Last March we reported that several states were considering bans on banning plastic bags. Now our home state of Michigan has gotten in on the action, signing the ban on bans into law on December 28th.
According to The Washington Post:
Michigan Lt. Gov. Brian Calley signed the new public act into law on Wednesday, along with 11 other bills. Gov. Rick Snyder is currently on vacation out of state, local news sources reported, and Calley has the authority to sign bills into law in his absence.
The new public act prohibits local ordinances from “regulating the use, disposition, or sale of, prohibiting or restricting, or imposing any fee, charge, or tax on certain containers,” including plastic bags, as well as cups, bottles and other forms of packaging. This means individual cities and municipalities are not allowed to ban plastic bags or charge customers a fee for using them.
As with many of these types of actions, opinions are mixed, with The Washington Post noting that the Michigan Restaurant Association is in favor of the ban because it prevents a “patchwork approach of additional regulations,” while Rep. Jeff Irwin, a democrat from Ann Arbor, spoke out against the bill because it “attacks local control.”
It’s worth mentioning, as we have in the past, that laws about bag bans and bans on bag bans don’t affect our products specifically, but since they do impact a closely related industry, we’ll continue to update you on these issues as they develop.
Dec 8, 2016 | Uncategorized
I wanted to post a quick update about what has been happening with PE resin pricing lately, and also about lead times.
After a year of ups and downs in resin pricing, 2016 appears to be closing out on a relatively quiet note. According to The Plastics Exchange, PE “contracts seem to be gravitating towards a decrease of $.03/lb, as originally offered by several producers early in the month. Processors, noting significant weakness in the spot market, were looking for a sharper decline – perhaps there will be additional relief in December.”
Indeed, we have been hearing the same thing, and any decreases in resin costs will be a welcome course direction change that can offset some of the increases we’ve seen.
As for our current lead times, we’re still meeting 99% of of all due dates, but schedules remain very tight—we’ve been having to schedule many jobs with as much as a 4-week lead-time window. With that in mind, if you know you’ll be placing an order sometime within the next month or so, now would be a good time to send us a note so we can schedule appropriately.
If you have any questions or comments about this update, please send us an email. Thank you for your continued business, and we look forward to serving you.
