Hurricane Ida threatens global plastic markets – The Property Chronicle
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Hurricane Ida threatens global plastic markets

The Professor

(By the time this article is published, Hurricane Ida will have made landfall and the aftermath will be already under assessment. One hopes, as always, that the damage is minimal in terms of lives and property, but the same nature which we so readily associate with beauty and balance has a brutal, indiscriminate side. My thoughts go out to the people in Ida’s path.)

Of the many industries which have been strained to the limit of their capacity over the past 18 months, few have struggled as mightily, and ‘quietly’, as the resins and plastics sector. In part, the low-profile nature of its adversity has mostly to do with the obscure nature of what is otherwise a ubiquitous business. 

Demand gone skyward

The Covid pandemic struck producers of commodity polymers (relatively weak, cheap to manufacture, disposable plastics) hard from the very beginning. Among the first products to see a huge upsurge in demand were rubber gloves, face masks, and the plastic material used in packaging those and numerous other medical supplies

There is an almost endless list of medical applications for plastics. Polyvinyl chloride (PVC) can be found in approximately 40% of all disposable medical devices, including flexible fluid bags, tubing, oxygen masks, surgical gloves, etc. Polycarbonate (PC) is the material of choice for medical devices and equipment, replacing glass applications in items such as blood oxygenators, hemodialysers, intravenous connectors and high pressure syringes, in addition to safety glasses and face shields. Given its clarity and ease of sterilisation, polystyrene (PS) is used for a wide range of applications, including tissue culture trays, test tubes, petri dishes, diagnostic components and housings for tests. 

In May 2020, the launch of the Trump administration’s Operation Warp Speed added mightily to that strain. By jump-starting a massive, parallel drug development programme calling for hundreds of millions of vaccine doses, the need for plastic liners and wrapping were understandably immense. (The need for masks and gear during the associated clinical trials was similarly demanding.) 

But none of that includes the incredible demand driven by millions upon millions of people confined to their homes worldwide and the commensurate explosion in retail consumption. Amazon, Walmart and other retailers filled record numbers of orders, each of which required adhesive tape, bubble wrap and clear packaging seal.  

US Producer Price Index, Plastic Resins and Materials (2011 – present)

The Professor

About Peter C. Earle

Peter C. Earle is an economist and writer who joined AIER in 2018 and prior to that spent over 20 years as a trader and analyst in global financial markets on Wall Street. His research focuses on financial markets, monetary issues, and economic history. He has been quoted in the Wall Street Journal, Reuters, NPR, and in numerous other publications.

Articles by Peter C. Earle

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