Every resin grade has its own price movements. Feedstock costs, supply availability, and demand drivers are unique to each material. That being said, the general trend is that prices for most resins are starting to soften – but are still well above pre-covid levels.
The graphic below illustrates the 3-year price increases for 8 resin grades, with the 3-month change indicated by the bar color. According to data from plasticsnews.com, Nylon and PC pricing remained relatively flat September to December, while PP and PVC saw the greatest 3-month declines.
Earlier this month, we held Executive Roundtables with purchasing leaders from manufacturing companies that buy resins. Below are some of the insights they shared.
- Global Commodity Director for a CNC machine manufacturer shared that resin prices are still elevated, and no suppliers have come to them with price decreases. They hold quarterly meetings with their top 10 resins spend suppliers to discuss costs and the impacts of commodity indexes and foreign exchange.
- Global Category Manager for a manufacturer of truck bodies and trailers shared that they are starting to get suppliers to walk back price increases, and they are pushing suppliers to recover more price increases. They use index-based price agreements and hedge with banks for major material purchases.
- Global Purchasing Director for an automotive supplier shared that they buy resins for automotive interiors, but most are directed by their customers or have index-based pricing agreements. Where they are exposed is in the material content of purchased plastic components – they have been relatively successful minimizing resin price increases by following a standard playbook to delay supplier price increases.
- Purchasing Director for a manufacturer of chrome plated plastic parts for automotive and commercial truck sectors shared that most of their spend id directed by customers or they have index-based pricing agreements. They have experienced recent price decreases for ABS and ASA materials.
- Strategic Sourcing Manager for an automotive wiring and connector manufacturer shared that they do not use index-based pricing agreements with resin suppliers, but rather rely on their global footprint to leverage local price advantages. For example, they have found that PBT prices decreased in Asia before North America, primarily due to feedstock price movements.
- Global Purchasing Director for an automotive supplier shared that they are taking advantage of a stronger USD (relative to the EURO) to negotiate better resin pricing (they had traditionally negotiated in EUROs). They are also working to align currency reference in customer and supplier contracts.