After the temporary summer hikes the resin prices are indicating a definitely gloomier mood of the industry. PlasticNews.com made a summary of the overall impact of the North American recession on the resin prices in their most recent commodity review.  In their account, the resin prices dropped back to the year 2003 levels. Of course, there is a big underlying question, that the given price level reflects to a decreased market demand, that has put the industry under tremendous pressure to downsize.

The market contraction of some of the resin types throughout the last twelve month reaches as much as over 20%. The fact that there are some fairly new resin capacities on the market from Middle-East makes the situation even more difficult in North America.

Overall the best performer resin is polyethylene, if we don’t count polypropylene, which enjoyed significant upward pressure due to the growing export demand and very low domestic inventories. Polyethylene’s relative strength is coming from two main factors. Food industry and food packaging are among the industries least impacted by the recession. The other factor is due to a trend of food and packaging industries switching over from polystyrene to polyethylene packaging in an effort to gain efficiencies. The actual year to year sales volume of resins for packaging film has grown by 2.5%.

The mid-term projection for 2010 for the growth of polyethylene is above 5% annual for both North America and globally. This projection and the conservative price movement of the PE resin throughout the last few months give quite a solid outlook to my customers and the plastic converting industry.

Check back soon as we are going to introduce some brand new Cast Film Line machines and Slitter Rewinders on our website in the next couple of weeks.