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COVID-19 The pandemic is having a massive, chilling effect on global oil prices, and thus on petrochemical markets. Add to this the fact that demand for plastic resins used in durable goods has suffered while material demand for packaging and healthcare applications has skyrocketed, and the result is an unprecedented supply, demand, and pricing situation. We asked two experts to explain what it means for buyers and sellers. Compiled by Mark Stephen, editor
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f the many factors that are considered before selection of a plastic resin – impact and tensile strength, elasticity, chemical resistance, and more – cost is usually at the top of the list. Indeed, it might just be the most important point of all to people who make their livings in plastics. The price of crude oil is a leading indicator for resin prices, and oil prices are extremely sensitive to changes in geopolitical conditions. And there hasn’t been a bigger geopolitical change in decades than the ongoing COVID-19
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Canadian Plastics September 2020
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pandemic, which has had a catastrophic impact on the global oil industry. Oil prices plunged in the early days of the crisis as economies slowed dramatically, and while the worst effects of COVID-19 on global oil demand have now passed, they will continue to echo as the market slowly recovers in the second half of 2020. Adding to the complexity and uncertainty, the crisis has played havoc with consumer buying habits throughout the world. Suppliers have throttled back on production of some materials to adjust
to weakened demand, while other resins are suddenly in greater demand than ever. Closer to home, the strong growth in North American resin exports of the last two years could falter in 2020 as overseas production gets cheaper. So, what does it all mean for resin buyers and sellers? What resins have been, and will continue to be, affected, and how? We turned to Zachary Moore and Jeremy Pafford, analysts with Houston, Tex.-based market intelligence firm ICIS, for some answers. www.canplastics.com
2020-08-21 1:54 PM
