Jun 26, 2013 | Uncategorized
We’ve heard a constant drumbeat from resin suppliers for increases in raw material pricing each month of this year. Two have gone through—a 5-cent increase and a 4-cent increase.
For a couple months now, there has been an additional 4-cent increase in play. From what we have seen, it is still official, but implementation is another matter (so far as June contracts).
Here is a quote from The Plastics Exchange‘s Market Update:
“Spot Polyethylene prices were steady and it seems that June contracts could be flat for the third straight month, as production constrained supplies offset generally softer demand. When the final figures were tallied, May proved to be a strong sales month; domestic buyers purchased nearly 2.7 billion lbs of Polyethylene, 150 million lbs more than the 2013 YTD monthly average. Exports were also swift as nearly 750 million lbs were sent offshore, the most this year. Even though reactors ran at a solid 93% of nameplate capacity, producers were able to reduce their inventories by 250 million lbs, falling below 3.1 billion lbs for the first time since September 2012.”
From my reading, I see some resilient softness in the market as a whole. It may very well turn out that June pricing does end up to be flat…and that the increase will be tried again in July. For now, we’ll have to wait and see.
If you have any questions about resin pricing or anything else, please don’t hesitate to call us at (800) 272-2634 or send us an email. Thank you for your continued business.
May 21, 2013 | Uncategorized
Polyethylene producers are trying to implement their 4-cent per pound increase that was rolled over in April, but processors again think otherwise—they are instead looking for some relief from the 9-cent hike endured in the 1st quarter. As for the past two or three months, we have had stable pricing, albeit at 9 cents higher than it was at the beginning of the year.
Domestic polyethylene demand was light in April—at 2.42 billion pounds, it was almost 140 million pounds below the trailing 12-month average. Polyethylene exports ran at 600 million pounds, about 5 percent less than the 12 month average. May contracts for polyethylene and polypropylene are still up in the air, but should see only minor movement.
Polyethylene is a globally traded commodity and so global economic activity, in my opinion, is a prime motivator for where pricing trends go. We will have to wait and see what the supply and demand brings. As always, I will update you again when I know more about which path pricing will take.
Apr 2, 2013 | Uncategorized
In my February update, I mentioned that a resin price increase set for February had been effectively pushed out to March. That was only half accurate. There were some suppliers that delayed their increase on some grades until March, but other grades did indeed show an increase. In the end, it took March’s pricing to smooth things out across grades.
So, for the beginning of this year, we have seen two increases implemented which total 9 cents per pound. To follow these increases, suppliers have put another increase of 4 cents per pound on the table for April resins.
I made my call a little early on the February level (I expected pricing to be flat) in anticipation of rollbacks from other suppliers that didn’t completely pan out.
Calling pricing for the resin market is often best done after the fact. Such is the story of the crystal ball. Consequently, we are often in a “wait and see mode” for a period of time until contracts settle out. That being said, we know of a 4-cent increase for April. As of right now it is indeed in effect, bringing the total increase for resin pricing to 13 cents per pound so far this year.
I will have an update later that will tell whether this increase has taken hold.
Thank you for your continued business, and we look forward to serving you. If you have any questions or concerns, please call one of our customer service representatives at (800) 272-2634 or send us an email.
Feb 25, 2013 | Uncategorized
In my last post, I informed you that, in addition to the resin price increase that took effect in January, suppliers were calling for an additional 4-cent per pound increase for February 1st. That price increase has not yet taken hold, and it now appears it will be postponed until March.
There has also been some recent news about a refinery problem in the Midwest. In addition to impacting gasoline prices, refinery problems can sometimes impact polyethylene pricing as well if the refineries make changes to fill gaps in production.
I will do my best to keep you up to date on these developments and, as always, if you have any questions or concerns, please send us an email or call us at (800) 272-2634.
Jan 21, 2013 | Uncategorized
As the dust settles, it now seems clear that resin producers have indeed managed to get a price increase through for January. As a result, we will need to address this with pricing for orders that are entered February 11th, 2013 or after. We will continue to take orders at existing pricing levels until that date.
Please note that suppliers are backing the January increase up with a call for a 4-cent per pound increase for February 1st. We may need to address that one at a later date as well.
Stay tuned for more updates on this front and, as always, if you have any questions or concerns, please feel free to contact us.
Nov 14, 2012 | Uncategorized
Quite often, large companies will have multiple locations across the country. And even though those locations may have many of the same needs, they often use different suppliers.
Recently, a prospective customer came to us because they weren’t happy with the quality of the poly bags they had been receiving from their supplier—their bags had been arriving with black specks on them. If they weren’t able to get the high-quality bags they needed right away, there was a chance they would have to shut down production.
We hear stories like this all the time, but in this case, the prospective customer only contacted us because one of their other locations (five states away) is a satisfied customer of ours and recommended us to them. In the end, we were able to fulfill their need for high-quality bags on a schedule that allowed them to keep their production lines running.
This story is a great example of the power of word of mouth and how it can make or break a sale—if we hadn’t committed to providing the best bags and customer service possible, there’s a pretty good chance we wouldn’t have been first on that customer’s call list, or anyone else’s call list for that matter. Thank you again for allowing us to serve you.
