In February, 2021, the plastics industry was devastated by a freak winter storm that laid waste to Texas power grids and 80% of U.S. resin production.1 As though the widespread after effects of the natural disaster weren’t enough for the plastics industry to handle, substantial polypropylene (PP) and polyethylene (PE) price hikes and a 30% diminishment of production capacity added to the burden.1
In the year since, prices remained volatile and sluggish supply chain logistics kept materials from timely distribution; yet, there seemed to be an undercurrent of optimism in the industry. PP and PE production capacity was on the upswing despite shipping woes. Resin prices were leveling off, if not slightly receding.2 The global resin shortage was presumably reaching a tipping point.
Unfortunately, the optimism was short-lived. Russia invaded Ukraine on February 24, 2022. Its impact waylaid the market’s potential recovery and further complicated ongoing industry challenges.
Supply chains are vital in any industry, yet they can be vulnerable to devastating disruption. The current supply chain upheaval drives the point home, but it should also give you pause.
Are you working with suppliers that can accurately pinpoint sources for every material, process, and shipment related to your orders and getting products to market? In turn, can you use this information to confidently manage your projects, vendors, and business? These questions — and answers — are crucial in understanding if you’re leveraging the benefits of supply chain mapping.
Viewing 2021 through the lens of the resin shortage, the year went out much like it came in.
Q4 found commodity resins polypropylene (PP) and polyethylene (PE) available in greater quantities at lower prices.1 However, for many manufacturers, custom injection molding partners, and other supply chain vendors, the late-year good news was overshadowed by resin shortage challenges that will likely continue to pervade the plastics industry in 2022.
The widespread and ongoing disruptions in the plastics industry has given rise to a certain degree of panic. Manufacturers and suppliers are at the mercy of broken supply chains, and solutions for resins, service, and delivery aren’t always readily available.
As Hurricane Ida unleashed its Category 4 fury on the state of Louisiana, plastics industry professionals kept a wary eye on the storm’s path. The repercussions of Hurricane Laura and Winter Storm Uri upended the resins market, which is still struggling. As the fifth strongest hurricane to ever make landfall in the continental United States1, Ida could have easily wiped out any progress made toward market restoration.
But, for the most part, Ida spared the plastics industry from further devastation. The hurricane veered away from the hub of resin production facilities in western Louisiana and eastern Texas, some of which were just coming back online.
Consumer applications are diverse. Simply having products on the market isn't enough to build a customer base or keep pace with the competition.
Understanding the latest injection molding industry trends and partnering with a custom injection molder to apply them in creating highly differentiated products more readily translates to sustained success. It also gives you greater control over quality, cost, and time to market.
Injection molding industry trends suggest that a number of factors influence applications within the consumer market, such as:
The resin shortage has injection molders and the larger plastics industry struggling to find balance. The late-February storm that blew into Texas and shut down 80% of U.S. resin production was the catalyst, but only one contributing factor.1
Industry authorities point to several reasons why resin supply and resin cost continue to fluctuate and how the ripple effect impacts suppliers and injection molders. A snapshot of current pricing illustrates the topsy-turvy landscape:
A global supply chain is attractive to many manufacturers. Years of lower costs, lower wages, and profitable final product price points lured many American manufacturers into what consulting firm A.T. Kearney dubbed “offshoring inertia.”1 Manufacturing and supply chain decisions were not necessarily prioritized, and offshore production continued.
Then, the turmoil of 2020 took hold. The escalation of the pandemic and global trade tensions exposed inherent risk by disrupting the once-comfortable global manufacturing and supply chain dynamic. Offshoring inertia quickly gave way to strategic reshoring initiatives for at least 69% of American manufacturing and industrial companies.2 Nearly 60% of industrial leaders surveyed by Gartner indicated expedited plans to maximize their supply chain resiliency within three years.2 About one-third of those same respondents noted new emphasis on moving business out of China and other countries.3
The escalation of political, trade, and pandemic-related tensions have called manufacturers and their suppliers into question. Some supply chains are snapping under the strain, and OEMs are left to find answers for — and rectify — costly failures.
Nearly half of respondents to a recent Thomas Industrial poll placed “Fabricated Materials (machined, stamped, extruded, or molded material)” at the top of the list of things needed for supply chain stabilization and consistent production.1 With that comes close scrutiny of custom injection molding companies when OEMs are streamlining suppliers.