After the tumultuous start to 2021, engineering thermoplastics market participants were expecting a return to more representative activity starting in the third quarter. That is to say – less chaos. The first half of the year was marked by extreme supply tightness in most petrochemical and polymer markets which, along with transportation costs and logistics problems world-wide, provided the perfect backdrop for sustained record-high prices for many products. Supply-side issues are improving but there are still lingering issues across value chains as companies are struggling to re-fill inventories.
Demand for engineering plastics has been very strong over the past 6-9 months despite all the problems that have impacted various parts of the global economy. The COVID-19 pandemic and lockdowns created new market dynamics as people travelled less, worked from home more than ever, and spent money they would have used on holidays for consumer goods and home improvements.
This has been a boon for a variety of engineering plastics, particularly for materials linked to packaging, leisure goods, and electronic devices. On the other hand, automobile industry output remains constrained, affecting materials such as polyamide resin and polycarbonate.
With many industries driving down inventories to the bare minimum in late 2020, the race to re-supply has been thwarted by bad weather, a lack of available ocean-going vessels, shipping container shortages and road haulage slowdowns. This has led to shortages of basic materials such as steel, copper, lumber and cement. Engineering plastics are shipped around the world, and prices have been impacted by the extraordinary increases in shipping container costs.
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