Plastic resin prices poised to soar…again.

Plastic resins prices have already surged almost 40% since June and with even the limited damage caused by Rita. Prices will surge again.

Going to the gas station has become increasing painful for everyone the past few months and we all knew that this is not the last place our wallets and pocketbooks were going to be affected by the ever increasing cost for oil and natural gas.

Soaring natural gas prices are not only going to be dramatically increasing the cost to heat homes this winter, they are pushing up the costs of chemicals and resins that will increase across the board packaging costs.

Natural gas is going to increase resin prices for packaging because not only it is and integral raw material in plastic resin but it is a fuel source to run the plastic resin manufacturing facilities.

Not only is styrene, glycols and other raw materials in tight supply because of 2 hurricane-related production shutdowns and transportation issues, fuel surcharges for trucking materials to their destinations have doubled creating business-threatening cost changes. Manufactures in the plastic molding industry will have no choice but to pass these increases costs to their customers, which will ultimately hit consumers hard.

If this is not bad enough, the law of supply and demand will also dictate higher prices for plastic resin in packaging as according to the U.S. Census Bureau figures, the U.S. trade deficit in plastics products grew to an astounding $1.47 billion in 2003 from a mere $526 million in 2002. Resin shortages may even become an even bigger concern than higher prices.

According to Chuck Hamley, president of Advanced Extrusions Inc "So far we are not having trouble getting material. But it is my No. 1 concern".