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Pricing Artificially Inflated?

Another round of price increases for plastic products are coming at us.  The rumor mill is alive with the forecasts of the number of increases and the total amount. The most aggressive forecasts call for three increases in the next 60 to 90 days with the total increase being over 17 cents a pound from today's prices.

Items included in the price increase are not only products made out of plastic such as automobiles, eye glasses and can liners, but also those items that are packaged in plastic products such as soft drinks, milk, meats and shampoo.

"The engine of these increases is the cost of ethylene and or ethane, base material in Polyethylene resin production," explained Joe Justin, CEO of WhiteHall Products. "The manufacturers of those products are reducing the amount given to the marketplace thus driving up the prices. The resin manufacturers that are vertically integrated from the well head will enjoy obscene margins based upon the artificial inflation. Don't overlook the role of the speculators in this process," he said.

"The resin manufacturers... will enjoy obscene margins..."

Natural gas which is the primary base material for plastic products in this country remains at record-low pricing. Justin expressed that it is the price of natural gas that should be considered when forecasting plastics price increases, however artificial inflation with ethylene and ethane appears to be setting the standard.

Stay tuned for pricing fluctuations throughout the year for plastic products.