The list of major issues in the entire industry is long…
Shortages in upstream feedstock: ethylene stocks (upstream raw material to produce PE) have still not recovered from the effects of the hurricanes in the US, now the snowstorm in Texas led to various outages at petrochemical plants in Texas (reduced PE production)
Low inventory levels (due to above)
Scheduled turnarounds (i.e., caprolactam producer Fibrant (as cited by KI and Tecnon))
Supply chain disruptions (Suez canal, container availability, packaging cost increases, fire at the Pemex Cangrejera Petrochemical complex in Mexico shut down yet another major PE production facility)
These factors coupled with strong downstream demand from China and increased demand from the automotive and packaging industry (due to the pandemic) have led to skyrocketing prices across most major polymers.
Already today, it is becoming a major challenge to secure sufficient polymer resins to fulfill all our current orders. We are in constant negotiations with our suppliers, and supply security has our priority over cost and price, but constant supply will only be possible at substantially increased costs.
While it is challenging at the moment to look beyond the rising wall of disruptions, all market participants agree that this tense situation will continue at least until the end of the year. Taking into account the current April price tags, most major polymers are headed for another 20% to 40% further price increases!
We see it as our responsibility to keep you informed on all market forces and will continue to keep you posted on any further developments.
If you have any further questions or concerns, please do not hesitate to reach out. Our team is more than happy to discuss this situation with you.