Not to be confused with the 2009 film staring Meryl Streep and Alec Baldwin (with some scene-stealing support from Steve Martin and John Krasinski) "It's Complicated" is the best way to describe how commodity plastic resin is priced in the marketplace.
If you purchase plastic pallets, you have likely experienced this pricing volatility first hand.
The Good Old Days
Here are the three biggest traditional factors that impact resin pricing:
For 50 years these relatively straightforward influencers have kept most commodities resin prices trading in a narrow range. Hurricane Katrina did blow the lid off that, which brings us to our first “new” major influence.
In fact, the producing areas around Houston have always been subject to severe weather events. That said, the deep freeze of 2021 was unprecedented and caused disruptions in production that lasted for many weeks. Since then, the anticipation of weather interruptions is mentioned frequently and pointed to as an ongoing factor in the volatility of resin pricing.
In the wake of the COVID-19 outbreak, we have our number two factor. To keep material flowing, producers have had to increase wages and use other tactics to attract workers, not always successfully. Shortages persist, even amid higher wages.
OK, so we have beautiful bright sunny weather, plenty of help, but prices are still jumping all over the place, mostly up. What gives? Well, here is where it really does get complicated. The short list:
Which is why a pundit can make a living just trying to predict where resin prices might land next.
Navigating Resin Prices
Would you like more detail on how resin prices might affect the cost of plastic pallets, containers and other material handling products you purchase? Post your inquiry here and watch for my next post about the recycled plastic material market.
Post by: Hartson Poland, Business Development - Plastic
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