PE ended 2021 up 28 cents, PP up 39.5 cents

From PP, PE prices take a fall in December (Plastics News):

Average selling prices for PE slid 5 cents per pound in December, while PP prices tumbled 15 cents, according to buyers and sellers contacted by Plastics News. It’s the third consecutive 5-cent drop seen in the PE market. The October drop was the first seen in 17 months, as prices had jumped starting in early 2020 when pandemic-related demand couldn’t be met because of weather-related production outages.

Mike Burns, a PE market analyst with Resin Technology Inc. in Fort Worth, Texas, said that “warehouses are full [of PE], and exports can’t get out because of a lack of containers or other supply chain problems.”

Although PE prices dropped 15 cents in late 2021, the market finished the year up a net of 28 cents, according to the PN resin pricing chart.

Even with the late-year declines, PP prices are up a net of 39.5 cents since December 2020. North American PP supplies will be boosted in 2022 when Inter Pipeline Ltd.’s Heartland Petrochemical Complex brings more than 1 billion pounds of new capacity online in Strathcona County, Alberta.

Cream cheese, ransomware, and supply chain

Bloomberg writes this week about the hidden cause of the cream cheese shortage: their supply chain was disrupted by a ransomware attack.

Schreiber Foods in Wisconsin, a top maker of cream cheese, closed for days in October after hackers compromised plants and distribution centers. The company is big enough that the lost production shook U.S. markets.

How are companies addressing the growing threat of cyber attacks? The Economist writes in their issue about The World Ahead 2022:

More than a third of senior executives surveyed in March 2021 by Munich Re, a reinsurer, are considering taking out a cyber-insurance policy, which pays out for ransomware-related losses.

Curbing cyber-crime ultimately requires getting the basics right: educating employees to be wary of suspicious emails; keeping software up to date; and backing up data.

Many insurance brokers that sell cyber attack insurance policies also include free online training to reduce the risk of becoming a victim.

The Economist writes that there is reason to believe higher rates of turnover are here to stay. Their columnist writes generally about the three things managers should be doing: gauge the retention risk, pull different levels to retain different types of people, and plan for how to find new workers.

First, they should systematically gauge the retention risk that their firm faces. Working out what has driven people to quit is too late; rather than exit interviews, forward-thinking firms conduct “stay interviews” to find out what keeps employees. Focusing on teams cut back during the pandemic is another tactic: burnout rates are likely to be higher in departments that took lay-offs. Understanding a firm’s vulnerability to other employers is also key. When behemoths like Amazon or Walmart raise wages or add perks, the effects ripple beyond retailing.

Second, managers need to pull different levers to retain different types of people. Salaries matter to everyone but for lower-wage workers in particular, benefits like health care have also become central. A recent survey of young Americans by Jefferies, an investment bank, found that health concerns were the prime reason why people with only a high-school education had quit their jobs.

Firms also need to think harder about the career paths that entry-level employees can take. In a recent survey of large firms conducted by the Institute for Corporate Productivity, a research outfit, a majority admitted they did not have adequate data about the skills of their workers, making it harder to spot talent. A quarter reckoned that LinkedIn knew more about their workforce’s capabilities than their own firms did.

Third, managers should plan for how to find new workers. Remote working makes it easier to lose people but also to bring freelancers on board quickly. Qualification demands can be relaxed. In recent years IBM has removed the requirement for undergraduate degrees from over half of its American job openings. And there is no better time for firms to take aim at dim-witted regulation. In response to a shortage of lorry drivers, Britain’s government has decided to combine separate tests for driving rigid and articulated lorries into one.

How to manage the Great Resignation,

PE and PP markets appear poised for a correction

From “Lower prices ahead for PE, PP resins as supplies improve” (Plastics News):

After more than a year of increases, prices for polyethylene and polypropylene resins are expected to trend downward. Market analysts Nick Vafiadis and Joel Morales of IHS Markit gave their outlooks for PE and PP markets Oct. 27 as part of the online Global Plastics Summit 2021.”

Vafiadis said that COVID-19 and “epic weather events” have constrained production of PE resin and delayed new capacity from coming on. Those conditions have led to higher prices since early 2020, but the market “now appears poised for a correction,” he added.

[…] In North America, about 9 billion pounds in PE capacity expansions are expected in the near future. Most recently, Gulf Coast Capital Ventures — a joint venture between ExxonMobil and Sabic — added almost 3 billion pounds of capacity in Corpus Christi, Texas.

Global PE operating rates are expected to range from the low to high 80s in the near term. Global oversupply was expected to be around 24 billion pounds before the pandemic, but now is projected to be less than 14 billion pounds.

The net result of these moves is expected to be lower PE resin prices. “Prices have peaked and are ready to decline because of new capacity and the resolution of storm outages,” Vafiadis said. “They’ll be mitigated somewhat by higher energy prices, but [PE] prices are at or near cyclical peaks in all regions.”

Auto partnership wants new plastic exterior parts

From “Plastics bring solutions in auto lighting, exteriors for autonomous cars”:

The automotive industry needs new concepts to meet optical and physical requirements for exterior parts, as signaling and communication become important aspects for a move toward automated driving.

Auto suppliers Marelli and Samvardhana Motherson Automotive Systems Group have formed a new partnership to integrate sensors for advanced driver-assistance systems and autonomous driving in illuminated exterior body parts like front grilles, bumpers and others.

The partnership plans to create translucent, back-lit trim parts and other decorative panels, with LED lighting shining through them at night and taking on the color of the car body in daylight, both partners told Plastics News in a joint statement.

“Parts like front or rear ends, fenders and rocker panels will evolve into smart illuminated body panels that will give vehicles an even stronger brand signature,” the joint statement said. “Smart illumination opens new possibilities for OEMs to support diversification of brands and models, also with possible different day and night styles.

While the companies work together to develop parts like bumper fascias, which aren’t commonly translucent, out of optical materials, they will also have to meet safety requirements and integrate sensors, like LiDARs, radars and cameras, as autonomous driving systems become required features.

“It is becoming more and more important for the authorities to set rules on how to make fully automated cars recognizable,” the statement said. “Future illuminated parts offer new openings for this purpose and can be used for communication as well.”

Bloomberg columnist and professor of economics at George Mason University on the supply chain breakdown:

…some key nerve centers of the world economy have been hit by a mix of Covid and bad luck, especially in the latter part of this year. Transportation, energy and high-quality semiconductor chips all are experiencing big problems at the same time, for reasons which are distinct yet broadly related.

Start with transportation. While some Chinese ports have been dormant or operating at reduced capacity because of Covid, that is hardly the only issue. A robust trade in durable goods has placed great strain on containers, ships and port operations around the world. The price of containers has skyrocketed, and can be more than 10 times higher than it was just two years ago. In short, a lot of international trade has slowed considerably, plus some of it no longer is profitable.

In some cases, transport-related services are being rationed, as prices are being kept down — maybe to avoid alienating loyal buyers, or maybe because the sellers are not sure if the current demand shocks are permanent. Again, the net result is that a lot of trade simply isn’t happening in a timely manner. […]

Furthermore, a lot of port activity and related local transportation is labor-intensive. Many parts of the world are facing labor shortages, as people are not sure how to reconfigure their post-Covid work futures, or in some cases government benefits may be keeping them from working. That adds further delays to trade networks. […]

So on one side of the equation are trade delays, input delays, higher trade and transport costs, much higher energy prices and chip shortages. On the other side are American and European consumers, who saved enormous amounts of money during 2020 and early 2021 and are now spending it. This combination has fueled price inflation. The demand is hitting the market, and the supply can’t catch up. And it’s not just one problem that has an easy, direct fix, but rather a series of interlocking paths of economic chaos and delay.

Estimated 10 billion pounds of PE production shut down in the Gulf Coast

From “Resin markets may feel wrath of Ida while recovering from past weather blasts” (Plastics News):

The Gulf Coast of Louisiana is home to many plants making plastic resins, as well as feedstocks needed to make those materials. Most of those plants began to close Aug. 28 in advance of the storm. As of mid-day Aug. 30, no major damage had been reported from any plastics or petrochemicals plants in the region.

But no firms had released a timetable for a potential restart.  Electrical power remains out throughout the region, with almost 1 million people without power. Many roads and rail lines also can’t be used because of high water levels. […]

The Resin Technology Inc. consulting firm in Fort Worth, Texas, estimated that 10.3 billion pounds of annual PE production has been shut down. That production is operated by Dow Inc. in Taft and Plaquemine and by ExxonMobil Chemical in Baton Rouge.

RTI also estimated that 7.4 billion pounds of annual PVC resin production operated by Shintech Inc. in Plaquemine and Addis, Formosa Plastics Corp. USA in Baton Rouge and Westlake Chemical Corp. in Plaquemine and Geismar also are shut down.

The region also is home to several polystyrene production sites, as well as sites making elastomers, polyurethane feedstocks and other materials. Refineries that make propylene monomer as a byproduct of gasoline production also are in the area. Some of that propylene then is used to make polypropylene resin.

As a result, resin prices that buyers had hoped to see leveling out after 18 months of steady increases could be heading up again — an unwelcome event for plastics processors throughout North America.

Consolidation’s big impact on the rotomolding sector

From Consolidation has the biggest impact on rotomolding sector (Plastics News):

With combined sales of more than $2.6 billion for fiscal 2020, 107 firms made the ranking this year. That’s up 3.5 percent vs. 2019. The average sales per company was $23.9 million, that’s up 10 percent.

Proprietary molding makes up the biggest share among the molder, with $1.5 billion, or 60 percent of the total. Custom and captive come in at $605 million and $128 million, respectively.

You may have noticed that we have fewer firms ranked this year and we can look to consolidation for the reason. Tank Holding Corp., which tops our list with estimated $420 million in related sales, includes four acquired companies from our previous list: Dura-Cast Products Inc.; Rotational Molding Inc.; Rotational Molding of Utah and Spin Products Inc.

Myers Industries Inc., enters our list this year at No. 4, with $164.3 million, combining previously listed Ameri-Kart Corp. plus recently acquired Elkhart Plastics Inc. and Trilogy Plastics Inc.

Pacific Supply Chain Updates

Bloomberg reports:

…all inbound and outbound container services at the Meishan terminal in China’s Ningbo-Zhoushan port were halted Wednesday until further notice due to what was described as a “system disruption.” The local government said an employee tested positive for coronavirus. […] Even short suspensions in services at major ports like Ningbo can have wider effects on delivery times and transport costs.

The number of anchored container ships waiting to enter the twin ports of Los Angeles and Long Beach stood at 31 as of Tuesday, more than triple the number in late June. 

Meanwhile, the spot rate for a 40-foot container from Shanghai to L.A. stayed near a record high this week, at $10,322,  according to the Drewry World Container Index published Thursday.

Cargo-handling robots from three US companies

From “The last pieces of warehouse automation will soon be in place” (The Economist):

The robotics division of Honeywell, a large American technology company, has come up with a vehicle-sized unit that fits onto the back of a lorry. It has a large arm fitted with suction cups which can pick up several boxes at a time and then feed them onto a conveyor belt, or knock down a wall of boxes and sweep them onto the conveyor. An individual human worker can unload between 600 and 1,200 boxes an hour. Honeywell hopes that, once its robot is perfected, a single crew chief will be able to supervise the simultaneous unloading of three or four lorries, each at rates of up to 1,500 boxes an hour.


In Massachusetts, a firm called Boston Dynamics takes a different approach from Honeywell’s. Boston Dynamics is famous in the wider world for an acrobatic humanoid robot called Atlas, and for Spot, a robot that resembles a dog and is now on sale as a device for monitoring what is happening in factories and other large spaces. The firm’s good-handling system, Stretch, is, however, the first it has custom-built for a particular task.

Stretch is smaller and more mobile than Honeywell’s robot, and is able, according to Kevin Blankespoor, Boston Dynamics’ general manager of warehouse robotics, to move easily from one lorry to another, or to a different part of a site altogether. It sports a single arm festooned with sensors and a suction gripper able to handle boxes weighing up to about 25kg. Unlike Honeywell’s system, Stretch can already manage the trick of examining a wall of boxes, working out their sizes and shapes, and choosing which to pick up first. It is, though, slower. The aim is that it will be able to handle 800 cases an hour.

A third contender, Dill, is made by the Pickle Robot Company, also based in Massachusetts. Andrew Meyer, Pickle’s boss, believes Dill has an edge over the competition because Pickle’s engineers have focused on the robot’s ability to handle messy trailers with irregular loads. This is not just a matter of machine vision and an ability to work out where boxes are, but also of understanding the laws of physics, and therefore how particular objects will behave. That helps Dill decide which is the best box to pick up next, and how to deal with it as speedily as possible without dropping it.

In particular, Dill is designed for what Mr Meyer terms “centaur operation”, in which human and robot collaborate, rather than the human’s role being merely supervisory. Dill is skilled at spotting problems it cannot deal with and then calling in human assistance. It can handle 98% of cases on its own, Mr Meyer claims—though it has problems with things like damaged goods and unexpected objects. The upshot is an arrangement which, he says, has a maximum capacity of 1,600 packages an hour, with a realistic average of 1,000.

The next task, which all three companies are now engaged in, is to run the unloading process in reverse by using robots to load lorries in the first place. Besides simply lugging boxes around, this also involves working out how to stack them efficiently.