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.