Polypropylene (PP) resin and other plastic resins have experienced a rapid price increase over the past three months, affecting the cost of geosynthetic products, according to Fred C. Chuck, P.E., executive director of the Geosynthetic Materials Association (GMA) at Advanced Textiles Association. “Market conditions continue to remain highly volatile, with resin availability and pricing changing daily,” says Chuck. 

According to a February 9 article in The Plastics Exchange Market Report, “At least a half-dozen resin producers have experienced Force Majeure conditions, creating severe shortages for both polyethylene and polypropylene resins. Consequently, spot resin trading has been hyperactive as resin processors, many on supply allocation, have flocked to the spot market as they scramble to procure material.”

The report continues, “Through the years, we have seen several hurricanes and petrochemical/plant fires, tariffs, economic crisis, waves of new production, sudden plant outages, numerous Force Majeure declarations and huge swings in energy and feedstock costs, but none of the previous markets, resulting from these sometimes catastrophic catalysts, compare to the extreme environment we currently engage [in].” The combination of these events has accumulated over the past two to three quarters, heavily impacting the industry.  

Chuck further elaborates that the worldwide demand for personal protective equipment (PPE) to shield against the COVID-19 outbreak has caused the demand for spun-bond and needlepunched nonwovens to increase dramatically. He notes, “As the economy slowed, the number of vehicular miles driven around the world has plummeted, causing oil refineries to scale back on production. This has had the side effect of lowering production of propylene, the basic feedstock of the geosynthetics raw material polypropylene.”

According to Lilli Manolis Sherman, senior editor of Plastics Technology, “Polypropylene prices in December moved up a total of 14¢/lb, 10¢ of which was in step with propylene monomer prices and 4¢ went toward boosting supplier margins. Moreover, suppliers were looking for another 5–6¢/lb for January in addition to any change in the monomer contract price.”

The Plastics Exchange Market Report also notes, “PP Copolymer has been the scarcest of materials and soared $.16/lb in January, while homopolymer resins climbed $.17/lb, catching up a penny to CoPP, which had built an extra $.04/lb premium during the 2nd half of 2020. The rise in spot prices closely matched the January contract increase.”

“Several geosynthetics manufactures are experiencing a reluctance on the part of agencies and owners not accepting the price increase pass through from the contractors, creating a pressure point in the industry,” notes Chuck, adding, “The construction cycle operates with projects quoted in a ‘low-bid’ environment, but do not require material procurement for months. In the past, distributors have been able to hold pricing during the longer cycle as the resin price has been less volatile.”   

GMA and Geosynthetics magazine will continue to monitor this issue and will provide future information to address the wider concerns of the GMA membership.