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Southern Illinois | So my experience with raw resins comes from the automotive industry. One of my responsibilities was to reconcile pricing with with OEM’s when resin prices adjusted, below are my take aways.
1. Resin adjustments occur quarterly unless their are extenuating circumstances i.e. the freeze out in East Texas and Western Louisiana that you referenced.
2. Resins appeared to be mostly linked to natural gas futures but it is not a 100% correlation. Small pricing adjustments occurred in sink with increases and decreases in LNG but the large shifts like we are experiencing now did not.
3. Costs normally stabilized at levels for at least 18 months and up to 3-4 years with little to no movement outsider of the LNG derived updates. Before COVID, the Hurricane in 2020 and the deep freeze, TPO resins were .$80/lb to 1.10/lb. Those prices as of the start of Q3 were $1.35/lb to $1.65/lb.
My guess is resin costs will stabilize in Q4 ‘21-Q1 ‘22 but price relief will not occur until supply starts to significantly outpace demand and resin suppliers start sending out their sales guys to push more product at a lower price. I would be surprised if there is a correction prior to mid 2023 barring some time of a Black Swan event. | |
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Tile Resin
