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A global shortage is impacting companies across every industry. Summary. Disruptions of the raw materials for many common kinds of plastics are now occurring. They are the latest problem to strike global supply chains.
Between natural disasters, Covid-19 precautions, and labor shortages, 2020 and 2021 have delt several huge disruptions to the global supply chain. The 2021 plastic industry has not been spared, with increased demand and production difficulties leading to dramatic price increases and product shortages.
The 2021 plastic industry has not been spared, with increased demand and production difficulties leading to dramatic price increases and product shortages. If you don’t have time to read the article or you just prefer to watch videos, you can learn about what’s driving the high cost of plastic in 2021 in this video.
Plastic cups and takeout containers are in short supply, and it’s hitting restaurants hard. Small, non-chain restaurants are in an especially difficult position, competing for supplies with big franchises that have much greater buying power.
Why Is There a Plastic Shortage?
You might remember the product shortages during the COVID-19 pandemic. Plastic manufacturers were also impacted by shutdowns and supply scarcity. Fewer truck drivers and port workers were available. Lockdowns and workplace safety precautions meant labor availability was down. The pandemic created a ripple effect on the supply chain that we are still feeling today.
There is tremendous demand for plastics fabrication and yet so little supply. Some experts estimate it could be another year before the plastic shortage ends.
Now most clear materials can be found – readily available or within 3 to 4 weeks.
Then in February 2021, a winter storm paralyzed that very same geographic region. Manufacturers were forced to shut down again and demand for energy increased. Some facilities sustained damage from the storm, further delaying production. Then to top it all off a month later, the Suez Canal was blocked.
Because of the variability in production and tight controls on distribution , the cost of manufacture remains a tricky issue. For example, pricing of sheet goods may be determined on the actual ship day, not at the time the order is placed. This becomes a bit of a conundrum for establishing pricing for finished, fabricated and formed parts. Purchase orders issued for most of these sheet goods are subject to and can expect to have price increases up until shipment. Even if you stick to a material with relatively stable lead times, you still might encounter unpredictable price fluctuations.
Even if you stick to a material with relative ly stable lead times , you still might encounter unpredictable price fluctuations. To complicate things further still, the scarcity of chemicals also means that plastic products have fewer options for customization.
Although lead times have decreased for clear plastics, they still remain high for many of the other plastic types. All PVC’s and their derivatives such as ABS, Styrene’s, HDPE’s, and even phenolics, are experiencing chemical and resin shortages as well as strict allocations to producers.
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