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Brentwood Plastics blog

Polyethylene Price Increases after Harvey

Posted by Joel Longstreth on Thu, Apr 25, 2019 @ 04:03 PM

Replacement costs are uncertain in Harvey's aftermath.

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Predictions range from complacent denial from buyers of finished parts ( "it might go up" ) to "scary" from a decades - old plastics credit reporting agency.  

 

It's a fluid situation which is not moving by the hour like back in 1973 - 74.  In the wake of hurricanes Katrina and Rita in 2005, the CDI became the agreed-upon benchmark for polyethylene prices.  At this writing, the nominated three cent increase for August is generally accepted with a few exceptions.  The supply chain dominoes haven't all fallen yet, so there is no sense of panic or urgency among the smaller

 processors. It's like the force majeure letters never existed. 

Large volume buyers of finished goods are fighting the August 3 cent increase tooth and nail.  What is happening does not fit their Walmartized reality.  The large volume extruders have laid  people off and they are scrounging for resin.  Dow's second letter announces a second price increase, but fails to mention allocation.  Customers are asking us for documentation because it is difficult to pass price increases along these days.

Herewith is a compilation of letters and updates we have received in Harvey's aftermath.  

Harveypriceincreaseletters

 

 
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Topics: PE resin price, price for polyethylene, polyethylene price,

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