Sep 15, 2017 | Uncategorized
In our last post, we mentioned that our own resin supply should be unaffected by Hurricane Harvey, but that resin costs would likely be on the rise. As predicted, the rounds of resin price increases proposed over the past couple months have been bolstered by the production disruptions, and it now looks like both of the recent increases totaling $.07/lb will go through.
As for our own supply, we are closely monitoring our resin supplies and do not expect that we will have any issues.
From The Plastics Exchange‘s most recent update:
“Although the $.03/lb polyethylene increase slated for August was unlikely to take hold, Hurricane Harvey came along to instead seal the deal with swift and full implementation. At the time, there were only two PE producers that had issued an additional $.04/lb increase for Sept contracts, but after the storm, the balance of producers nominated their own $.04/lb increases with target dates of either Sept 15th or Oct 1st. Given the massive supply disruptions, we expect these additional increases to also become solid.”
Looking ahead, it’s difficult to say if there will be more increases beyond these—much depends on how quickly and easily producers can get back to business as usual. As always, we’ll keep you updated on significant 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.
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.
