Ever since the Covid-19 pandemic impeded factory capabilities and sown chaos in desperate buyers, the world has been experiencing supply shortages on every level. From toilet paper to petrol, virtually no industry was safe. An industry that has likewise suffered a shortage blow since mid of 2020 is the world’s plastics industry, with supply disruptions that continue to remain visible to this day.
Surveys report on ongoing polymer sourcing problems and specialized resin shortages
The world’s longest running plastics trade federation, The British Plastics Federation, conducted a business conditions survey for the UK plastics industry in January 2022 and the results show only slight improvements. 60% of surveyed companies (88 in total) reported problems sourcing polymer, compared to 80% who were experiencing polymer supply issues in August 2021. After the extraordinary disruptions in the past two years, the turmoil in supply chains for polyethylene (PE), polypropylene (PP), mono-ethylene glycol (MEG), and other polymers has now somewhat calmed, yet remains far from being over. The question on everyone’s mind persists: How much longer is the shortage expected to last for?
Looking at the industry in 2022 through the lens of what we have learned in 2021, resin shortage challenges are likely to cause trouble for many manufacturers, custom injection moulding partners and other supply chain partners. According to AlixPartners’ survey data1, more than 60% of manufacturers were experiencing resin shortages as of September 2021 and the situation is expected to continue until manufacturing capacity catches up with demand.
While some commodity resins have returned to supply-demand-cost balance, specialty resins such as the ones containing glass fibres, flame retardant properties, or UV additives remain limited2. The increased demand for specialized resins, especially in the case of glass fibre, has forced manufacturers into quoting Force Majeure or add surcharges onto orders. However, even if resin production continues to pick up at a slow rate, a shortage of containers, truck drivers, and other transportation equipment might severely limit supplies.
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