February 2025 | Market Update
Engineering Resins Flat, A New Long-term Source for Antimony
From Chuck Hoop, Business Director, Star Plastics
Materials
ABS, nylon general purpose and polycarbonate prices continue to be flat with available supply and flat demand. It is expected to be this way for the next three to six months based on various industry sources. PBT FR moved up (30 to 40 CPP increase) along with FR nylons (30 CPP increase). These and the FR olefins market have seen from 40 to 60 CPP increases due to the antimony shortage with limited supplies. Read on about the reason for the increase in these materials. In the world of acetal – Reuters reports on January 16th, China would apply provisional duties on imports of industrial plastics from the US, European Union, Japan and Taiwan after an anti-dumping investigation that was started in May of 2024. The provisional levies on polyacetal copolymers range from 3.8% to 74.9% depending on the country and company and will be implemented starting January 24th. Why? China launched the investigation in May which is the same week that U.S. hiked tariffs on Chinese electric vehicles and the European Union launched a trade investigation into certain Chinese steel imports. See full article here: https://www.reuters.com/business/china-imposes-provisional-duties-us-eu-japan-taiwan-industrial-plastics-2025-01-16/
Weather
The cold snap in January didn’t seem to have nearly the impact of the winter storm of 2021 that affected the south. If you recall, we had an extended cold snap with snow and ice that caused significant damage to the manufacturing sector throughout the south. This time, the event was shorter lived at just a few days before moving on. Also, many of the plants were better prepared for a cold snap weather event. Just two plants, BASF and Total, shut down for a brief period of time to allow the storm to pass. Many others went into a hot idle mode. The biggest issue was a delay in shipping given the region is not equipped to handle snow especially at the amounts that fell – Houston reported 7 inches, New Orleans reported 10 inches.
Antimony & North America
Antimony trioxide is naturally occurring and used in plastics as a flame retardant for nylon, PBT, and olefins such as polypropylene. The three largest producers are Russia, China, and Tajikistan producing 80% of the world’s supply of ATO. And again, none of these three countries are on our Christmas card list. With that, President Biden with two weeks left in his presidency finally acted on the issue. Reuters reported in early January that the Idaho Antimony mine permit had been fast tracked by then President Biden to start production after China limited supplies to the world.
From Reuters
Permitting for the mine, backed by billionaire investor John Paulson, comes after Beijing last month blocked exports to the U.S. of antimony, a metal used to make weapons, solar panels, flame retardants and other goods for which there are no current American sources. The U.S. Forest Service released the final record of decision for Perpetua’s Stibnite project – essentially the mine’s permit – after an eight-year review process, according to documents published on the agency’s website. Shares of Boise, Idaho-based Perpetua gained 9.1% in after-hours trading after Reuters reported the permit decision earlier on Friday. Perpetua’s mine will supply more than 35% of America’s annual antimony needs once it opens by 2028 and produce 450,000 ounces of gold each year, a dual revenue stream expected to keep the project financially afloat regardless of any steps Beijing may take to sway markets. For the full story: https://www.reuters.com/markets/commodities/biden-administration-issues-permit-perpetuas-idaho-antimony-gold-mine-2025-01-03/
With that, Celanese announced mid-December and increase of 30 CPP for PBT, nylon, PPP and others materials for January 1.
Macroeconomic View
The quarterly issue of The Perc Report came out in January as well. in summary, 2024 saw some early gains (until April) and then demand tapered off as the year moved forward with growth of just 1.7% versus 2023. Perc continues to say the interest rate caused slower demand and therefore production in the plastics sector. The continued labor shortage doesn’t seem to have an end in sight, so companies moved to technology to fill the gap though, the higher interest rates slowed down investment in 2024. Mold making saw parallel movement in the market similar to plastics purchases in 2024 with an early bump up and then the slow down. All while resin prices remained stable in 2024 specifically for the commodities – PP, PET, PE, with just a 3% dip overall. Capacity utilization for the year was estimated at ~73% for plastics processors on the whole.
The housing market in 2024 was down at 3.7% growth over 2023 but 2025 looks like about 4.5% over 2024. We’ll take what we can get! Electronics for 2025 is a mixed bag of from 2.5 to 3.5% growth depending on the source but all are saying the same thing. The additions in AI in the next generation computers is increasing manufacturing growth as we buy the ‘latest and greatest’ equipment.
PLASTICS (the Plastics Industry Association) has reported the GDP for 2025 at 2.7%, which is up from 2.6% depending on what the housing sector does during the year. This is all while unemployment for 2024 came in at 4.1% and is expected to bump up a bit to 4.3% while plastics had an unemployment rate of 3.3% in 2024.
Crude oil prices are projected to drop a bit in 2025 with expectations to land around $70 (currently at $76) for WTI. Brent crude, coming from the North Sea is expected to settle at $73 (currently at $74) per barrel. With the new administration, we may see bigger changes with increased production locally; the action and therefore the effect has yet to be seen.
Interest rates are still falling with a 100 basis point drop in 2024 with two more drops expected in 2025. The 30-year housing rates are expected to land around 6.3% in 2025 from 6.7% in 2024. Rates are expected to fall gradually or 0.1% each quarter in 2025.
It was great to have the International Longshoreman’s negotiations come to a positive conclusion just a few days prior to the strike vote, which would have affected the ports from Maine down to Miamai and to Texas. The final topic was the use of AI in loading and unloading containers. They agreed that as AI was added to increase productivity in work, there would be jobs added as well protecting the union workers from being displaced.
Tariffs
The incoming Trump administration has acted quickly on tariffs, but if there’s one thing we can take from this situation, it’s a state of constant change. Revisions are made multiple times per day, so we’ll plan on updating you on the facts that mean the most to you when events warrant.
Sustainability and Regulatory
Star has proudly received its second-year rating from EcoVadis, a global leader in corporate sustainability scoring. We’ve been awarded a “committed” badge for the second year in a row and scored eight points and 17 percentile points higher than last year. We’re committed to growing in our sustainability journey, using the rating and its recommendations as our guide. Finally, we wanted to remind you of our newly launched PFAS free polycarbonate offering. Learn more about the products at our LinkedIn page: www.linkedin.com/company/star-plastics-inc.
And you can find more information on our website at: https://www.starplastics.com/pfas/.