Market Update — September 2024

International Markets Shift, Complications in Shipping

In polymer pricing, Chemical Marketing Analytics reported that GP injection grade PC was flat
for August while optical was up by 5 CPP. ABS GP and injection were reported to be flat while
nylon 6 was down 2 CPP and 66 dropped 3 CPP.

International freight: There are concerns with retailers and China trade, such as Europe and
North America imposing a 25% tax on EVs coming into NA and the EU. There will be
repercussions for this, and now is the time to ship material for Christmas purchases. The
container companies are making up lost margin by increasing prices now, during the busy time,
while they can get the revenue. Once we get through the seasonal push, we believe we’ll see
prices level back off to the $3,000 level.

China wains and Mexico, Vietnam, and Thailand flourish. It seems that many of the electronics
OEMs are moving tooling out of China to either Mexico or Thailand for long term production.
The proposed China taxes and surcharges could be implemented on any industry, and it seems
the electronics makers are taking warning and moving out of China proactively. One major firm
is moving up to 70% of their production out of China in the next 3 years. Another major
computer producer has already moved 20% of their production to Vietnam. Remember that Star
has a global footprint and able to meet your needs with the same product no matter where you
are located.

The International Longshoremen’s Association (ILA), represented by the United States Maritime
Alliance (USMX), contract expires September 30, and it seems a strike is likely to happen on
October 1st. This will affect 36 ports on the East Coast and deep south from Maine all the way to
Texas. Couple this with the Red Sea issues that have started again with Houthi rebel attacks from
Yemen. Along with and the Panama Canal drought issues that have surfaced again, there will be
more congestion for West Coast ports. See letter here. Director of Domestic Policy Max Hyman
posed questions to congressional members as well as to Secretary of Transportation Buttigieg at
a Transportation & Infrastructure Committee recently. At this point, with the ILA doesn’t want
any assistance/interference from outside agencies (Biden administration/Department of Labor).
All we can do is apply pressure. Please reach out to Max with any questions.
All for not? The National Association of Manufacturers reports on the lockout of the Canadian
railroad workers, which started on August 21. At the start of the lockout, the Canadian
government stepped in and forced the rail workers to continue to work while contract
negotiations continue.

Neither of the two issues above inhibits Star’s ability to supply you, our customer.

Last month we reported that Sabic had come out with an increase for Cycolac™ and Valox™ FR
products of 28 and 30 cents per KG due to FR costing. It turns out there was a major antimony
mine issue in China at a significant antimony supplier. At the same time, the solar sector is
consuming more antimony in their offerings than other sectors. So, supply is down, and demand
is up.

Ineos and American Styrenics declared force majeure from the tornadoes that went through
Illinois on July 15. Ineos has a plant in Channahon, IL and AMSTY has a plant in Joliet. While
the plants themselves were not damaged, power was significantly affected with electrical
transmission towers destroyed during the storms. They were expecting it to take several weeks to
get power back and it would take time to bring plants back up and running. We have been
looking for an update, but information has not been readily available about the FMs and when
they may be lifted.

Sabic Mt. Vernon site went down on a planned maintenance cycle for about 4-6 weeks. Firing
back up is not easy and normally comes with its own potholes. Lead times continue to be eight
weeks from Sabic in a slow market.

The Perc Report came out with its monthly update from the ‘Plastics Industry Association’ and a
few highlights include:

There were over 800,000 fewer jobs added from 4/23 through 3/24 telling us that the jobs
market is not as robust as reported.

Prices continue to increase but at a slower rate than in prior months at 2.9% (headline
inflation). This is when you take out food and energy (core inflation at 3.2%.)

Some better news on 30-year fixed interest rates for mortgages, the rate fell to 6.5% last
week. The plastics and rubber unemployment rate dropped to 3.0% in July while June
had been 5.2%. Plus, the weekly hours in plastics and rubber went from 40.7 hours (June)
to 41.3 hours (July). These are showing positive signs looking forward it seems.

If you hear about market information which impacts the world of plastics and related businesses,
drop me an email at Choop@starplastics.com

Finally, if you can’t wait for your material from another supplier, whether it be PC, ABS, PBT,
Nylon 6, give us a call! We have many materials on the floor ready for quick delivery and our
strength in customer color makes a great partner for you!

Best Regards!
The Star Team