The COVID-19 pandemic has uprooted daily routines, processes, and markets worldwide. As consumer purchasing dropped dramatically in the United States during the start of the pandemic, producers and manufacturers drastically reduced operations to reflect economic trends. What these companies didn’t foresee, however, was the spike in consumer demand that would follow. This trend was seen across many industries and continues to cause problems visible in many markets, though some disruptions were handled better than others. The plastics industry specifically has taken a huge hit from these circumstances and struggles to recover.
As February rolled around, shockwaves from COVID-19 were coupled with extreme winter storms and cold temperatures in coastal areas, which halted many manufacturing operations in affected regions. Reduced capacities have forced suppliers such as DuPont, Ascend, BASF, LyondellBasell, and Chevron Phillips to declare force majeure on products of various types and from various processing locations. Producers that have yet to declare force majeure are overwhelmingly increasing prices and placing additional fees on their products and services. Despite this, consumer demand remained high through the start of 2021 and continues steadily. In addition to jeopardizing relationships with customers, the often-desperate measures put in place by companies impact the plastics market in a serious way.
Materials like Nylon 6, Nylon 6,6, and ABS are in tight supply, and those like PS and PP have quickly increased in price and are continuing to do so. In fact, export PP prices are at an all-time high in the United States, according to recent reports by S&P Global. As manufacturers scramble to strategize, consumers struggle with the now-broken supply chain that they rely on so heavily. As many Force Majeures remain in place and price increases are expected to continue, consumers are facing difficult sources concerning their budgets and suppliers.
While the winter storm issues may have been temporary, their effects will likely be felt long after the return of the sunshine. Furthermore, the COVID-19 pandemic is likely to remain threatening within the market as it continues to cause unexpected effects in consumer preference and material prices across industrial landscapes. Manufacturers can only hope to combat these challenges with systemic approaches and individual prioritizations.
During these tumultuous times, WV International is here to help navigate the plastics market. These circumstances are new to everyone, but we have seen plenty of challenges throughout our 30 years in the plastics industry. We are prepared to guide you through difficult decisions concerning your materials. In many cases, complex issues can be resolved by a strategic supplier change or resin replacement. We have the expertise required to find the solutions you need. Contact us today to see how we can help.