The 2021 Increase of Resin Prices
The pandemic has wreaked havoc on the historically stable plastic resin industry. Disruptions in the global supply chain, increasing demand for plastic packaging materials, and plastic production shutdowns have led to a severe spike in the price of plastic goods.
What Caused the Resin Shortage of 2021?
There are several reasons for the current resin shortage. As Summit Director of Sales Greg Ong put it, this “perfect storm hitting the plastic industry is actually ‘a couple of perfect storms’ combined.”
Increases in the Cost of Plastic in 2020 and 2021 by type
It’s not just plastic resin prices that have been high recently. Over the past two years, raw material costs were at record highs. Prices for steel, lumber, and plastic all skyrocketed as demand surged and production stalled.
Polypropylene Price (PP Price)
In January of 2021, US polypropylene prices rose from 13.5 to 96.5 cents per pound as a result of production shortages, import slowdowns, and exports to Latin America. In addition, the Mintec Global Packaging Index rose up by four points to 96.3, indicating an average cost of 55 cents per pound for plastic packaging materials.
PVC price changes
The extreme weather on the Gulf Coast has also dramatically altered 2021 plastic and resin prices. For example, polyvinyl chloride, or PVC was entirely offline for nearly a month during the Texas/Louisiana freeze.
Polyethylene resin price (HDPE and LDPE prices)
Brexit customs slowdowns also led to an increase in prices for EU high-density polyethylene (HDPE) and low-density polyethylene (LDPE). The cost for HDPE jumped by 8.3% in January to 68.98 cents per pound and the cost of LDPE rose by 9% to 77.52 cents per pound.
When Will the Cost of Plastic Return to Normal?
So, when will the price of plastics return to normal? That question might as well be posed to a crystal ball. If 2020/2021 has taught us anything, it’s that the future is unpredictable and that “normal” is elusive.
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