Rising resin prices and a shortage of available material is being felt by molders who are increasing their own prices, limiting deliveries and potentially halting auto production.
Confer Plastics Inc., a North Tonawanda, N.Y.-based blow molder and swimming pool accessory maker, is rationing material and had to lay off 40 workers because of the resin shortage.
“My concern is, that as fluid as the situation has become, we might have to lay off more in the coming weeks,” owner Bob Confer said in an email. “Currently, we’re planned to be in receipt of about 30-40 percent of our typical monthly demand, which is a really significant hit, especially in a year when we’ve been busier than we ever have been.”
Industrial material handling manufacturing giant Myers Industries Inc. is raising prices for its products by 8 percent as of March 1, citing “rapidly rising raw material costs, primarily resin.”
The Akron, Ohio-based molder whose business portfolio includes molders Ameri-Kart, Buckhorn and Elkhart Plastics, said the price increase is effective “across a majority of its portfolio of products.”
An auto industry executive who spoke with Crain’s Detroit Business on the condition of anonymity said some seating supplier assembly lines were expected to run out of foam by March 8.
“A lot of production is down still for oil refinery byproduct, and in a few days no one is going to be able to make [propylene oxide],” the executive said. “Everyone is scrambling. This problem is bigger and closer than the semiconductor issue.”
Others expect the impact of the foam shortage to hit sometime mid-month.
A North America-based purchasing executive with an automaker told Automotive News on March 4 that while the potential shortage is not an immediate issue for vehicle assembly plants, it may surface in a few weeks.
A source close to the PU flexible foam industry said the problem is industrywide, with raw materials shortages impacting production even before the bad weather hit.
“Producers are struggling to meet consumer demand, and the cold weather in Texas led to numerous plants being closed down,” the source added, “with problems being experienced all the way down the polyurethane foam supply chain.”
Confer said his company followed the lead of resin suppliers and declared force majeure for its products.
“Never in our 48 years of business have we done that, and we’ve seen the 1970s oil embargoes, the blizzard of ’77, the Great Recession, hurricanes hitting suppliers, the COVID pandemic and so much more,” he said. “That speaks to how unusual and how destructive this Texas cold spell has been and will be.”
Dustin Walsh is a reporter for Crain’s Detroit Business. Larry Vellequette, Laurence Iliff, Michael Martinez, Hannah Lutz, Urvaksh Karkaria and Philip Nussel of Automotive News; Greg Layson of Automotive News Canada; and Simon Robinson of Urethanes Technology International contributed to this report.
This post appeared first on Plastics News.