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April 2025 | Market Update

  1. News
  2. Long Lead Times, Logistics and Tariffs Everywhere

Long Lead Times, Logistics and Tariffs Everywhere

April 2025 | Market Update
From Chuck Hoop, Business Director, Star Plastics

Welcome to this month’s edition of the Monthly Market Update.

In the plastics market
Sabic had a planned shut down for maintenance this past fall (2024) and they continue to have issues coming back up since mid-January. With that, lead times are pushing up to 10 weeks; here’s the listing as of this month:

8+ Weeks
Lexan, Lexan glass filled, Valox PBT, Cycoloy PC/ABS
4+ Weeks
Cycolac ABS and SAN along with Geloy ASA.
18-28 Weeks
Lexan and Polypropylene Imports

For Star Plastics, we continue to be at three-week lead time. If you have a special need for a custom compound, please give us a call so we can see what can be done to meet your needs. Whether you need a custom color, natural or black, we’re focused on a three-week lead time.

Price Increase announcements in the engineering resins segment include:
BASF came out with Ultramid® 6 and 66 price increases of 10 to 12 CPP on February 28 for implementation on March 12. There was also a price increase announced for halogenated FRs in PA and PBT of 35 CPP.

CHIMEI has an antimony trioxide related supply issue for their FR ABS product line based on supply chain issues, price fluctuations, and availability. With that, they have put customers on notice that to be most efficient, their FR ABS may come from one of their two plants. And they don’t have a commitment to a given lead time.

Celanese announced an increase on February 19 for implementation on March 1. listing many products which they sell globally and due to increases in raw materials, additives, energy, freight and regulatory costs. The increases ranged from 10 CPP in PA6 and 66 to 30 CPP for FR PBT, and FR TPV.

Overall – pricing for engineering grade materials came out of CMA and other sources as flat in the last 30 days.

  • PC, GP has been flat at $1.58 with optical grade PC at $1.48 (also flat).
  • ABS, GP continues to be flat at $1.44 (injection) and $1.34 (extrusion).

Even with the imports continuing to come in from China specifically, PBT, at $1.46, was flat for the last several months.

The only movers in engineering resins, such as nylon 6, came in at $1.59 and 66 at $1.80 and both were up 2 CPP.

The CEO Confidence Index was published mid-March. It is a “barometer of the health of the U.S. economy from the perspective of U.S. chief executives. The measure of CEO confidence is based on CEOs’ perceptions of current and expected business and industry conditions.” The survey also gauges CEOs’ expectations about future actions their companies plan on taking in four key areas: capital spending, employment, recruiting, and wages. The results include:

  • Tariffs – 79% of manufacturing CEOs said the anticipate negative effects with half expecting short-term negative effects and 46% expecting lasting negative effects.
  • Revenue – 47% anticipate revenues to grow versus 91% in January.
  • Profit – 40% expect profits to increase in 2025 versus 80% expected in January. At the same time, there is a 46% expected margin contraction in 2025 which is up from just 9% in January.
  • Capital Expenditures – 29% intend on increasing CapEx versus 53% in January.
  • Hiring – 23% plan to add headcount versus Januarys 48%.
  • You can see the cautious nature of business in todays environment.

Shipping costs
From North American Manufacturing (NAM) it is important to remember that we hear about direct tariffs but not the indirect tariffs on imported goods on both Chinese vessel operators and fleets made up of Chinese built vessels. This will be passed onto the consumer in some form. More details follow.

Section 301 China Shipbuilding
The United States Trade Representative (USTR) proposed actions include fees ‘per port entry’ and restrictions on international maritime transport to increase the transport of U.S. goods on U.S. vessels

  • Proposed Service Fees: New fees of $1 million to $1.5 million would be charged on both Chinese vessel operators and on operators of fleets comprised of Chinese-built vessels. The charge applies per vessel entrance to a U.S. port. A service fee would also apply to maritime transport operators with prospective orders for Chinese vessels.
  • Restrictions on Services: To promote the transport of U.S. goods on U.S. vessels, USTR proposes a schedule that would require an increasing percentage of U.S. products per calendar year that is exported by vessel to be exported on U.S.-flagged vessels by U.S. operators, unless approved for an exemption. You can learn more at USTR.

For perspective on the application of tariffs, San Pedro Bay, which includes the ports of LA and Long Beach representing about 30% of U.S. imports, handles 150 vessels per month. This means potential tariffs of $150M to $225M in incremental costs to imported consumer goods.

On March 26, President Trump announced that he will implement 25% tariffs on imported automobiles. A White House official gave more details about President Trump’s tariff proposals late in the day on the 26th:

  • Cars coming into the U.S. under the USMCA trade agreement will be tariffed according to their foreign part content
  • Tariff revenues will be used to give tax cuts to Americans
  • Expect Congress to pass measure giving tax break to Americans who buy American cars
  • Regarding separate tariffs on Canada and Mexico, we are not going to be in a situation where there’s going to be multiple tariffs assessed
  • Want to move away from being assembly line for foreign parts, looking to restore manufacturing capability
  • No way for other countries to get exemption

In a statement from the White House, “Today, President Donald J. Trump signed a proclamation invoking Section 232 of the Trade Expansion Act of 1962 to impose a 25% tariff on imports of automobiles and certain automobile parts, addressing a critical threat to U.S. national security. The 25% tariff will be applied to imported passenger vehicles (sedans, SUVs, crossovers, minivans, cargo vans) and light trucks, as well as key automobile parts (engines, transmissions, powertrain parts, and electrical components), with processes to expand tariffs on additional parts if necessary. USMCA-compliant automobile parts will remain tariff-free until the Secretary of Commerce, in consultation with U.S. Customs and Border Protection (CBP), establishes a process to apply tariffs to their non-U.S. content.”
That evening, General Motors stock fell 6%, Ford lost 4%, while Tesla gained 1.2%. Toyota Motors’ U.S. dropped 2.2% and BMW closed 4.1% lower.

Canada is expected to issue retaliatory tariffs, and Mexico had not yet been heard from as of the publication of this update.

Mexico and Tariffs
FreightWaves reported from Borderlands on Sunday, March 23 that the tariffs could move Mexico into a recession: (Borderlands is a weekly update on the developments focused on US – Mexico border crossing trucking and trade.) Tariffs could lead Mexico into recession, according to the report, and Mexico’s economy could be the most affected by an escalating global trade war, leading the nation into a recession by the end of the year. The Organization for Economic Cooperation and Development says in a The OECD’s “Interim Economic Outlook,” released March 17th, predicted Mexico could fall into a recession with a 1.3% contraction in GDP in 2025. That compares to a GDP growth forecast of 1.2% the OECD estimated in a statement released in December. “The overall picture is one of generalized downgrades partly because of trade uncertainty and economic policy uncertainty, but also the imposition of tariffs,” Alvaro Pereira, OECD’s chief economist, said during a Monday, March 17th call. “We’re already seeing high trade uncertainty and economic policy uncertainty. This is already having an impact on confidence. We have downgraded almost every single country.”

Also, in that same newsletter from Freightwaves, Tetakawi (a provider of services for foreign manufacturing companies in the Mexico) reported that General Motors agreed to 10.25% wage increase at a Mexican plant; Mexico’s National Independent Union of Automotive Industry Workers announced an agreement for wage increases of up to 10.25% at the General Motors plant in Silao, Mexico, according to https://www.eleconomista.com.mx/empresas/sindicalistas-general-motors-alcanzan-acuerdo-incremento-salarial-planta-silao-20250318-751020.html. Workers in four categories who make up more than 60% of the plant’s workforce will receive a 10.25% raise, while the remaining 40% will get 9.25% increase. The GM plant in Silao produces Chevy Silverado and GMC Sierra pickup trucks. The factory employs over 8,000 workers, according to the union. The 2024 average wage in Mexico for an unskilled factory laborer is around $4.18 per hour, according to Tucson, Arizona-based Tetakawi.

Retaliatory Tariffs
The Wall Street Journal (WSJ) reported March 27, that ‘Trump threatens ‘far larger’ tariffs on EU, Canada if they jointly retaliate.’
President Donald Trump threatened to place “far larger” tariffs on the European Union and Canada than planned if they work together to retaliate in response to U.S. tariffs. Trump made the threat in a Truth Social post very early Thursday morning. “If the European Union works with Canada in order to do economic harm to the USA, large scale tariffs, far larger than currently planned, will be placed on them both in order to protect the best friend that each of those two countries has ever had!” Trump said in the post. The automotive tariffs could affect hundreds of billions of dollars in imports from key U.S. trading partners Mexico, Canada, China, South Korea, Japan and Germany. The vehicle tariffs are slated to begin next Wednesday, while the duties on certain automotive parts are scheduled to start May 3.

From Reuters in mid-March – Trump auto tariffs are coming, but not all levies will be imposed April 2, sending stocks higher By Andrea Shalal, David Lawder and Timothy Gardner:

“U.S. President Donald Trump said on Monday automobile tariffs are coming soon even as he indicated that not all of his threatened levies would be imposed on April 2 and some countries may get breaks, a move Wall Street took as a sign of flexibility on a matter that has roiled markets for weeks. At the same time, Trump opened another front in a global trade war by adding 25% secondary tariffs on any country that buys oil or gas from Venezuela, a directive that sent oil prices climbing. At the White House, Trump told reporters not all the new tariffs would be announced on April 2, and said he may give “a lot of countries” breaks on tariffs but provided no details.”

More on Transportation and Logistics
We’re trying to get ahead of the impending tariffs….causing gridlock in the rail and overland trucking segments:

A recent report from Plastics News shows that we have worked hard to get ahead of the tariffs – at least for the short term. The latest data on the U.S. trade deficit in goods is from January and it shows that the trade deficit skyrocketed by just over $150 billion. For perspective – all of 2024 the trade deficit was $920B. This increase in the deficit is the effect of tariffs and pre-buying of materials before tariffs are implemented. The full article can be found here: https://www.plasticsnews.com/kickstart/jarts-and-other-artifacts-trying-stay-ahead-tariffs-apple-may-pass-plastic-watch?utm_source=pn-dailyreport&utm_medium=email&utm_campaign=20250325&utm_content=idio-headline1

Going one level down on prebuying and understanding its impact based on the increased volume of imports – The Daily Breeze reported that Long Beach/LA ports handle nearly 30% of our imports to the United States. In January on a year over year basis, volumes were up 50% (a total of 1.87M containers went through the 2 ports in January). This is the largest month in the ports’ 117-year history of the ports and it surpassed January 2022 (second highest volume) which was up 19%. Recall in 2022, when we were still hungry for goods, the shelves were empty, and there were needs to fulfill. The full story is here: https://www.dailybreeze.com/2025/02/19/ports-of-la-long-beach-have-strong-start-to-2025-but-headwinds-lie-ahead-with-tariffs/

Star continues to stay ahead of the curve on supply chain issues to support our customers. We are here to help you maintain your business in a difficult time. Give us a call with your needs! PC, ABS, Nylon 6, Nylon 66, PCABS and FR versions of all those materials!

Unintended consequences of tariffs
Tariffs will have an impact on the automotive sector and plastics consumption. A news report from FreightWaves, was the announcement of layoffs of steel and mine workers as an unintended consequence of the 25% tariff on steel and aluminum. Cleveland-Cliffs Inc. said it will lay off more than 1,200 steel and mine workers in Michigan and Minnesota, citing market conditions and weak automotive production in the U.S. They are adjusting capacity as auto manufacturers slow production given uncertain demand for new cars in 2025 and the layoffs will begin July 15.

Also, during this same period, Canadian officials blamed tariffs for hundreds of steelworkers in Canada being laid off last month. “Canada Metal Processing Group (MPG) and its subsidiaries, Ivaco Rolling Mills, Sivaco, and Infasco, are announcing the difficult but necessary steps to respond to the current challenging market environment and the threat of incoming tariffs from the United States on steel and steel derivatives,” the company said in a Feb. 24 news release. The complete article is here: https://www.freightwaves.com/news/us-canadian-steelworkers-hit-with-layoffs-amid-tariff-uncertainty?oly_enc_id=1127F9648990B3V

Housing in the Market
Some good news on the recently stagnant housing front, it seems people are getting off the sidelines and back into the housing market. From the WSJ – Mortgage purchase applications in the week ended March 21 rose 7% from a year earlier, according to the Mortgage Bankers Association. Real-estate showings in the week ended March 27 were up 38% from early in the year, according to ShowingTime, a subsidiary of Zillow Group. That compares with last year, when showings rose 26% in the same period. Some first-time buyers eager to get into the market are moving farther from city centers to find something they can afford, said Kelli Kaspar, a real-estate agent in Durham, N.C. The full article can be seen here: https://www.wsj.com/economy/housing/home-buyers-start-to-come-off-sidelines-even-as-rates-prices-stay-stuck-0891e8f8?mod=djem10point

New Faces at Star

We have recently welcomed three new employees to our commercial team.

Cleveland Atkinson is Star’s new inside sales representative. In the plastics industry, he has worked both in technical and sales, most recently as account manager for Osterman and Company. He also worked in plastics at Entec Polymers as a plastics engineer and a west coast technical service rep. Cleveland is a resident of Long Island, New York, where he lives with his wife and their three children,

Juan P. Toro is our new sales and business development leader. Juan has been in the thermoplastics industry for over 25 years. He has held different commercial leadership and sales positions at GE Plastics, Celanese and most recently at Ascend Performance Materials. He lives in Dallas with his wife and three children.

Justin Harltley is Star’s new distribution sales leader. His home office is in South Lyon, Michigan, a suburb of Detroit. He has a wealth of experience in the industry, including his most recent stint as distribution sales manager for Lehvoss North America. He has also worked for Trivalence Technologies, Polyplastics USA, and Wellman Industries.

We’re building our team to help your team deliver for your customers and end product users.

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