Advanced Purchasing Dynamics

Linkedin
  • Home
  • Company
    • About Us
    • Board of Advisors
    • Leadership Team
    • Careers
  • Solutions
    • Purchasing Consulting
    • ProcureForce
    • Optimal Sourcing
    • Cost Management Certification
      • Upcoming CMC Classes
    • Training
      • Understanding and Negotiating Supplier Pricing and Costs
      • Building and Using Should-Be Cost Models
      • Strategic Negotiations
      • Effective Strategies and Analysis for Buying Capital Equipment
    • Placement
    • Cost Engineering
      • Variance as a Service (VaaS)
      • Benchmarking as a Service (BaaS)
      • Transparency as a Service (TaaS)
  • Knowledge Center
    • Glossary of Available Content
    • Upcoming Events
    • On-Demand
    • White Papers
  • Blog
  • Contact Us

Resin Prices Reverse Course, Trending Upward

June 30, 2020 by Mike Wynn Leave a Comment

Screen Shot 2020-06-30 at 10.33.03 AM

Pricing for most resins appears to have bottomed out in April. A variety of factors are driving commodity resin prices up in North America, including improving demand and rising feedstock costs, as well as idled production for PE. There are still opportunities for plastics manufacturers to lock in historically low resin pricing, but it’s not universal – some resin producers will see their costs go up over the next few months and years as the world economy recovers from the economic impact of the COVID-19 pandemic.

Plastics News reports that rising raw material costs are impacting prices for polyethylene, polypropylene, suspension PVC, solid polystyrene and PET bottle resin (“Demand, feedstocks take the wheel to drive resin price changes in June”, Frank Esposito, Plastics News, published June 26, 2020). They also cite supply impacts of temporary idling by Dow (PE) and Formosa (HDPE) of North American resin production.

The Plastics Exchange cites improving customer demand, including strong export demand, for rising spot pricing in a number of resin categories (“Market Update”, Michael Greenburg, The Plastics Exchange, published June 19, 2020). This is also reflected in the Plastics News article, as they describe strong demand for packaging during the COVID-19 pandemic, as well as general demand impacts from loosening restrictions on social distancing in many states.

Rising oil prices will continue to influence resin prices. Crude oil prices bottomed out in April, with Brent Crude spot prices averaging $18 per barrel before rebounding to $29 per barrel in May (“Short Term Energy Outlook”, U.S. Energy Information Administration, published June 9, 2020). The EIA expects oil prices to slowly increase, with Brent Crude spot prices in the $37 per barrel range for the second half of 2020 and the $48 per barrel range in 2021. This is still considerably lower than recent years, when Brent Crude spot prices averaged $64 per barrel in 2019 and $71 per barrel in 2018.

Click here to contact APD to review your resins spend for opportunities to quickly implement cost reductions that can be sustained over the long term.

Filed Under: Blog

Mike Wynn

About Mike Wynn

Mike leads the Optimal Sourcing practice for APD, where he guides the organization in applying its innovative methodology for implementing best purchasing practices that deliver immediate cost savings for customers. By leveraging commodity cost knowledge and supply base expertise, APD delivers solutions that quickly achieve real savings in resin, coiled steel, and other manufacturing commodities.

Leave a Reply Cancel reply

Your email address will not be published. Required fields are marked *

Webinar

Follow news from Advanced Purchasing Dynamics

Career

Download our recent white papers

Video

Register for training events/webinars

Class

Read our most recent blog posts

Upcoming Events

  1. APD Cost Management Certification Program

    May 4 @ 8:00 am - 10:00 am
  2. APD Cost Management Certification Program

    May 4 @ 1:00 pm - 3:00 pm
  3. APD Cost Management Certification Program

    June 1 @ 8:00 am - 10:00 am
  4. APD Cost Management Certification Program

    July 14 @ 1:00 pm - 3:00 pm

View All Events

Copyright © 2021 apurchasingd.com. All rights reserved