The only thing that's certain for resin distributors in mid-2023 is uncertainty.
"The best way to describe the year is uniquely challenging," said Kirt Dmytruk, president of Vinmar Polymers America in Houston. "Demand isn't robust at every level, but there is some good demand."
The year started strong on demand growth, then it slowed down considerably as it went on. Dmytruk said this pattern "has created challenges. … You have to make sure you have the right customer base and the right products … and adding new customers is critical."
Part of the challenge of assessing 2023 was also true in 2022 — comparisons to massive demand growth in 2021 that occurred as market recovered from the COVID-19 pandemic. 2021 "was like having 20 years of demand in one year," said Abby Khanna, co-founder of California Plastics in Downey, Calif. "Since then, there's been a correction in demand for resin and finished goods. … A lot of customers still have a lot of inventory, and that makes it hard to forecast and compare."
Inflation and higher interest rates also have caused "instability," according to Joe Mysza, commodity resins vice president at Mass Polymers in Bridgewater, N.J. "Some resins have operating rates in the 70s — that's not robust," he said. "Normal inventories have been reduced across the board. We're in a whole new set of circumstances as far as demand structure."
"The year started out strong, but the next few months have been spotty at best," said Larry Welnowski, owner of Nickel City Polymers in Buffalo, N.Y. "But the last couple of weeks [in mid-July] have been busy. There's no consistency to it."
Jerry Murcia, CEO of resin exporter Montachem International in Fort Lauderdale, Fla., said international demand slowed after the first five months of the year, even with more sales moving to Europe, which he said has become "kind of an island" because of higher costs for feedstocks needed to make resins.
The year "has been a grind," according to Kevin Chase, president of Chase Plastic Services Inc. in Clarkston, Mich. "I think we've been in a manufacturing recession for a year now. There's a labor shortage, and interest rates are higher."
2022 "has had its share of challenges — more than normal," said Ed Holland, chairman and CEO of M. Holland Co. in Northbrook, Ill. "If you look back to the end of the last business cycle in 2010, we've had an impressive run. It doesn't feel good now, but it's good compared to 2010.
"There's still the question of what is true demand and are we still rebalancing. Some of our customers are telling us that their sales volumes are down 17-25 percent. There's also a lot of geopolitical uncertainty, and businesses don't like uncertainty."
Market visibility and clarity to OEMs "have been a big challenge and question mark," according to Grant John, CEO at PolySource Inc. in Overland Park, Kan.
After two great years and "euphoria," sales at Osterman & Co. began to drop off in late 2022, said David Dever, executive vice president of sales, marketing and global operations at the Cheshire, Conn.-based firm. "Instead of consumers buying things like appliances over a period of time, it was like there was a three-year run in one year, then it slowed down," he added.