If resin distributors had theme songs, their selection for 2021 might be the Rolling Stones hit "You Can't Always Get What You Want."
That's been the case for availability of resin as well as for challenges in logistics, labor, packaging, shipping, rail and trucking since early 2020. The challenges of the COVID-19 pandemic were followed by hurricanes in the second half of 2020 and an unexpected ice storm that hit Texas in February.
(A backup song selection might be the Joe Jackson hit "You Can't Get What You Want (Till You Know What You Want)." But that might not apply, since distributors already know what they want.)
These tight supply conditions have been accompanied by surging demand from many plastics end markets as global economies recovered. The major supply/demand imbalance has made life challenging for resin distributors, who could sell more resin if they could only get more resin.
Plastics News recently checked in with executives at several resin distribution firms to see how they were handling the challenges of 2021. Here's what they had to say:
The tight supply/demand balance of 2021 is more extreme than many resin distributors have ever seen.
"There's a mind-blowing amount of shortages and demand happening right now," said Michael Bernich, president of Jamplast Inc. in Ellisville, Mo. "We've been able to maintain good relations with producers and suppliers, but it's been a challenge."
Many resin suppliers remain operating under force majeure supply limits or some form of sales allocation, causing distributors to make similar with their own customers, he added.
Marc Fern, executive vice president with M. Holland Co. in Northbrook, Ill., said that resin supplies haven't seen much improvement and that suppliers "are still trying to catch up with demand."
"We're far from getting everything we want when we need it," he added. "There's also been a shift in demand going from areas like home improvement and exercise equipment, when everyone was home because of the pandemic, to hospitality and entertainment.
"So now you're seeing things like stadiums being short on polypropylene cups. Do people have enough disposable income to keep spending in both of those areas?"
M. Holland President and CEO Ed Holland said that the polyethylene market "needs 90 days of interrupted production to gain some ground … but if we have a strong hurricane season, all bets are off."
He added that his firm's accounts "are spending enormous amounts of time managing price. … It's a lot of work."
The distribution unit of Avient Corp. in Avon Lake, Ohio, has seen strong financial results in 2021. The unit's second-quarter sales were up almost 70 percent vs. the same quarter in 2020 to $404.4 million, with operating profit up more than 64 percent to $23.7 million.