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Global Commodity Intelligence
Q2 2025 | APRIL - JUNE
Global Commodity Intelligence
Q2 2025 | APRIL - JUNE
Market Dynamics Driving Increased Resin Prices and Lead-Times
Charlotte Yau, Senior Sourcing Manager
The key factors affecting polymer pricing include the rising cost of raw materials, decreasing inventory levels, capacity constraints and production interruptions among others.
What You Should Know
- Force Majeures announced across major polymer manufacturers (Sabic, Covestro, Dupont, Celanese, BASF DSM, Ascend, Ineos, Eastman, Dow, Trinseo, Lyondell Basell, Flint Hills Resources and Domo) have created a panic buy in the market.
- Asian manufacturers (LG, Lotte, Chi Mei, Teijin, Kingfa, Polyplastics and GPPC) have not declared FM but materials are on allocations.
- Current resin lead-times have been extended beyond 30 weeks for Sabic and Dupont materials. Manufacturers are not accepting orders without forecast. Priorities are given to their ‘preferred’ customers.
- This is a good opportunity to work with customers to qualify alternative sourcing. Our team (COE for Resin & Plastics) will be most willing to work with you and your customers.
Rising Cost of Raw Materials
Price of feedstock is correlated to raw material prices such as Natural Gas, Naphtha and Brent Crude, all of which have increased by 20-80% over the last 12 months.
Decreasing Inventory Levels Inventory levels for polymers are at an all-time low, driving prices upwards particularly in polypropylene.
Capacity Constraints
Texas deep freeze and extreme cold weather in Europe has caused severe operational interruptions causing upward pressure on prices.
Gradually, the supply chain from refineries to chemical crackers, petrochemical plants and polymer plants began to resume production in sequence along the chain, but some plants are still shut down and expect to restart at the end of March or early April.
Increased Demand
Strong demand for downstream goods (PPE, hygiene items, packaging and consumer electronics) pushed the demand for polymers. This demand is expected to remain strong through 2021.
Other Factors
A sudden surge in demand has outstripped the available capacity of ships, container boxes and ports, resulting in shipping delays worldwide.
We will continue to monitor the situation and contact impacted suppliers to identify areas of risk and recommend action items to affected business units.
In the meantime, if you have any questions, please feel free to contact us directly.
- EMS Segment & SH&A (charlotte_yau@jabil.com)
- JGP Segment (joey_wang2@jabil.com)
- JPS Segment (meritxell_sansano@jabil.com)
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