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The Year Ahead in Resin Pricing
Make no mistake: 2022 will be an eventful year, as almost four million tons of new resin capacity come online in the United States while market dynamics and legislative action incentivize recycling.
December 29, 2021
More US resin capacity coming online, new opportunities for recycling, and the ripple effects of the wild ride of 2021 will affect resin prices in the year ahead, experts say.
“Resin producers in general learned a very valuable lesson during 2021, which is that the market could tolerate substantially higher resin prices before demand destruction takes the proverbial wind from the sails,” noted Michael Greenberg, CEO of the PlasticsExchange. “All markets cycle, and the fourth-quarter decreases are a fairly natural back-end result to the massive rally seen during the first two quarters of 2021. Unless something comes to disrupt the economic recovery . . . it is likely that resin producers will at some point manage to tip the balance of supply/demand back into their hands and, with this pricing power, begin another bull leg of the market cycle knowing that the market could accept higher resin prices again.”
Added Brian Balboa, Director of Market Intelligence for the PlasticsExchange, supply is ample and buyers are anticipating further price decay. “We are also seeing producers lowering production rates so as not to build additional inventory, especially since North America is expected to see just under four million tons of new resin capacity come online next year.” That capacity, he said, is expected to come from:
ExxonMobil and Sabic’s Gulf Coast Growth Ventures facility near Corpus Christi, TX, featuring two polyethylene (PE) units with a combined capacity of 1.3 million metric tons/year.
Shell Chemical's $6 billion petrochemical complex in Pennsylvania, which includes three PE units totaling 1.6 million metric tons/year.
Bayport Polymers in Texas, which is expected to start a 625,000 metric ton-per-year linear-low-density (LLD) PE unit.
Canada’s Nova Chemicals, which is expected to bring a 454,000 metric ton-per-year LLDPE unit to St. Clair, ON.