PVC resin supply continues to be disrupted by Hurricane Harvey. Details about how it will affect prices long term continue to develop, but at the time of this writing in mid-October, pricing appears to have stabilized at an increased level. Many of the manufacturers have been rationing supply, but that is beginning to ease. So far, the hurricane season has been a major disruptor in the price of oil, and that tends to affect PVC pricing as well. It is unknown, yet, how long this will continue, but with panic easing in the market, prices are beginning to stabilize, and supply is becoming more readily available.
It is not yet “business as usual” in the HDPE market, but at least there is light at the end of the tunnel. Most HDPE manufacturers are getting closer to being fully operational, but some are still experiencing issues - not necessarily with the HDPE resin but rather the additives that are folded into the finished product. Some of the chemical plants that produce key additives are still running way behind their production schedules for vital elements, such as environmental stress crack resistance and the additive that allows for fusion bonding. Without these additives there is no HDPE pipe. Resin and additives have been allocated to producers for the last month or so, but recently, producers have increased their allocations to between 70.0 and 80.0 percent.
Another key issue is transportation, including trucking and railroads. It has been reported that over the past several weeks, some HDPE pipe producers in Houston have experienced severe delays in getting resin, which in turn has caused them to shutter production lines.
The HDPE pipe market just took another three cents per pound increase in the middle of October and another one is scheduled for next month. Most experts are saying that the October increase will be the last, and the increase for November will more than likely be rescinded. Most manufacturers are running six to ten weeks, and some have lead times out sixteen weeks. As conditions in the Gulf Coast improve, expect the HDPE market to soften and give up most, if not all, of its excess earning prior to the hurricane
and may even continue to slip to levels not seen since mid-summer.
The American Supply Association (ASA) and its Industrial Piping Division (IPD) is the national organization serving wholesaler-distributors and their suppliers in the industrial and mechanical pipe-valve-fitting industry. As a powerful alliance of channel partners, we provide a forum for your upstream trading partners to exchange critical information and address key issues.
In particular, ASA’s IPD members constantly check the pulse of the materials and commodities they proudly supply to you. ASA’s IPD members are knowledgeable industry leaders, and those who volunteer their service on the IPD Executive Council compile and prepare the IPD Commodity Reports. The Reports contain some of the most current and qualified market data and information available from the industry’s leading manufacturers and distributors about emerging trends and other price-influencing actions and events.