Rising feedstock prices are the latest factor to impact the plastics resin market, according to a recent article by the Plastics Pipe Institute. Resin feedstock prices increased in February, largely in response to increased oil and natural gas prices. Oil prices have increased nearly 30% as a result of Russia’s attack on Ukraine last month.
The current Ukrainian conflict in Eastern Europe combined with the recent spikes in oil, feedstock and resin prices could potentially set the stage for a resin supply shortage. Lack of imports, additive material shortages, and supply chain/shipping/logistics challenges further complicate the situation. There is also the potential for an increased demand for American exports of oil and other commodities across Europe as the ongoing crisis affects supply chains throughout the region.
Many commodity and engineering resin manufacturers are still on allocation to meet production backlogs. Relief may come later in 2022 when new capacity comes online at Inter Pipeline Ltd.’s Heartland Petrochemical Complex in Alberta, Canada, and the ExxonMobil Chemical’s plant in Baton Rouge, Louisiana. Together, the two facilities will add approximately 2 billion pounds of resin production capacity.
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