Forward order of raw plastic materials to secure supply

Manufacturers using prime and engineering grade plastics face ongoing shortages, price increases and delivery delays.

2nd August 2021

Tex Plastics has adapted to forward order raw materials

To help provide some price stability for clients Tex Plastics has adapted its process to incorporate an more dynamic raw material cost. This is as a result of the shortages and long lead times are affecting plastics plastic injection moulded goods production as worldwide markets for plastics are experiencing significant disruptions. The ongoing issue is a result of several factors triggered by the initial reaction of when COVID first hit. Plastics suppliers reduced stocks based on uncertainties about COVID’s effects on the market.

The perfect storm for plastics raw materials

As compulsory lockdowns impacted, people purchased online in record numbers, creating a surge in demand for plastic products. This change in consumer buying behaviour was a triple whammy, as it coincided with unscheduled chemical processing and plastics manufacturing plant shutdowns caused by a mix of mechanical issues and extreme weather events. These shutdowns happened off and on throughout 2020 and in all markets. The result was reduced supplies of plastic chemical components (raw materials), which lowered plastics production. On top of this international shipping is currently unable to reallocate significant volumes of plastics and plastic raw materials. The cascading effect of logistics problems limits the movement of plastics between markets. Dramatically reduced air service has limited the availability of air freight capacity in passenger planes. Dedicated air freight carriers have been unable to compensate for this loss of air cargo capacity.

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