Material Cost Update – July 2017

On July 20, 2017 | by Formtech | in Featured News, Industry News, Uncategorized

For some time now compound suppliers have been able to maximize pricing for domestic customers by selling into the global market to control  supply versus demand in North America. Crude oil prices continue to be depressed, and international pricing for materials like Polypropylene (PP) and Polyethylene (PE) have been under pressure for all markets, including custom plastic extrusion.

Formtech Plastic Compound Pellets

This has also put pressure on domestic suppliers, as pricing for their offshore business has been reduced. Even with the global situation, PP and PE compound suppliers were able to maintain pricing, and in some instances were even able to move their pricing by as much as $0.01 per pound. For the most part, however, pricing firmed up and maintained at previous levels for the month of June. In the end, pricing was pretty stable for the month. With the holiday shutdown for Independence Day remembrance, historically this has spelled a slow start to July for material suppliers.

At this point July pricing is a bit of a jump ball. Compound suppliers are looking to at least keep pricing stable for the month of July, and then push for some sort of increase in August. Large scale compound buyers claim to be well stocked for the month, and will be providing downward pressure for August. This could make for an interesting August, and our hope is the net effect of the push-back from plastic extrusion suppliers, injection molders, blow molders, and rotational molders across the country will keep the pricing pressure on compound suppliers for the month of August.

Formtech extrudes custom plastic profiles from a wide variety of thermoplastic materials, including Polyethylene, Polypropylene, ABS, PVC, Acrylic, Polycarbonate, Wood Plastic Composite (WPC) and others. Material pricing is a huge part of our cost for a plastic extrusion, and the purpose of our material cost updates is to provide information to our current and prospective customers for planning purposes.

We serve diverse industries with custom plastic extrusions, from building and construction to merchandising (point of purchase), commercial refrigeration, office furniture and others. Some examples of profiles we manufacture include glass weatherstrip, exterior door jambs, plastic tubing, vinyl seawall, picture frames, replacement bumpers for display coolers, electrical raceway covers, and many, many others. We are experts at custom plastic extrusion, and have been servicing the industry for more than 47 years.

Give us a call at 614-531-9954 or email at sales@formtech.com for more information or a quotation.