Matium Monday Vol. 13 - Bringing the Network to Life
Inside the Volume
Economic Update
Interview clips from a conversation with Rick Demko emko Director of Recycling and Sustainability at PolyFlex Products / Nefab Group.
Resin Market Update from Michael Workman at Resin Technology, Inc.
A recap of the Maryland Recycling Network Annual Conference
Welcome to another edition of Matium Monday! At Matium, we believe in the power of perspectives to drive innovation and foster meaningful conversations. Every week, we are excited to bring voices from across the industry to share their insights, experiences, and expertise. We invite everyone from our network to contribute and be a part of this community. Whether you are a seasoned professional or a passionate newcomer, your voice matters, and we want to hear from you.
This week we welcome Mike Workman from Resin Technology Inc. to bring us “Workman’s Word: A Resin Market Update” as well as clips and perspective from a conversation with Rick Demko - Director of Recycling and Sustainability at PolyFlex Products / Nefab Group.
Last week, we also joined the Maryland Recycling Network at their annual conference where we learned more about their upcoming Needs Assessment and some of the preliminary work going into EPR. We will include some commentary from this event below.
Economic Update: Insights and Impacts from the FOMC Meeting
Last week, the Federal Open Market Committee (FOMC) held its much-anticipated June meeting. The key takeaway was the decision to maintain the benchmark interest rate range at 5.25% to 5.50%, marking the seventh consecutive meeting with no change. The FOMC also adjusted its rate cut projections for 2024, reducing the expected cuts from 75 basis points to 25 basis points, while increasing the 2025 rate cut projections from 75 basis points to 100 basis points .
The FOMC’s economic projections remained steady, with a growth estimate of 2.1% for 2024. Inflation, as measured by the Personal Consumption Expenditures (PCE) index, is projected to be 2.6% for the year, reflecting ongoing inflationary pressures. Despite these challenges, the labor market has shown resilience, with conditions returning to pre-pandemic levels .
Market reactions were positive following the FOMC announcement. The S&P 500 index saw a significant rally, hitting new highs, while the 10-year Treasury yield pulled back, indicating investor optimism. The Fed’s cautious optimism about achieving its inflation target suggests a stable yet vigilant approach to monetary policy moving forward .
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Network Links
We appreciate each and every member of our Network and the perspectives that everyone brings. One of the unique perspectives that I always enjoy hearing is that of Rick Demko.
Rick leads recycling and sustainability at PolyFlex and is leading the way when it comes to creating an optimized circular economy across the US as their parent company Nefab Group builds a presence in the states. Prior to this role, Rick worked at General Mill so his understanding of the recycling side of the industry is now being directly translated to the manufacturing side of the industry.
Rick is also heavily involved in EPR legislation within the state of Michigan. Bringing this all together, he is able to speak to how all parts of the recycling/manufacturing industry are able to come together through collaboration to achieve a not only circular but profitable supply chain.
Below are a few clips from our conversation with more of the conversation coming later this week.
Resin Market Update
Mike Workman is the Director of Business Development at Resin Technology, Inc. RTi is a technical advisory service that empowers procurement teams in plastic resin to add to bottom-line profitability through strategic market intelligence, transaction benchmarking, cost modeling and improved negotiation power.
Mike and team put out weekly market commentary and insights into the resin markets. We are grateful to have the team share some of their analysis with us and our Network.
You can download Mike’s full report here - and learn more about RTi here.
Workman’s Word
Main Points
Tropical storm in the Gulf likely to become first tropical storm of the season not all bad, bringing much needed rain to Tamaulipas state where Altamira MX thermoplastic resin and additive manufacturing region, hoping to help FM situations for PVC resin, butadiene rubber, TiO2 and other plants, among other things.
Increasing logistics costs on freight containers overseas as container availability is being filled with Asian EVs and due to increased risks/costs related to Houthi rebel activity.
Prime resin supply/demand dynamics in PE with preliminary ACC data have shown market that continues to favor the buyer, and downplays any real momentum for proposed price increases.
PP market continues to favor buyer despite Braskem and Invista FM, with both operations coming back online in the next 60 days.
Market Overview
In May, the polyethylene (PE) market saw significant changes. Inventory levels increased by 271.7 million lbs, despite a 3% drop in demand rates. Ethylene prices reached their highest since August 2022, contributing to flat export volumes due to high freight costs and extended railcar delays. June may see a 3 cents/lb price increase despite weak market sentiment.
The polypropylene (PP) market experienced a substantial inventory drop of 47.5 million lbs due to increased exports and production. This supports a potential 3-cent price hike in June, though some producers remain on force majeure until later in the summer. European and Chinese markets showed stable trends.
Polystyrene (PS) markets are facing tighter availability, especially with Styrolution on force majeure in Mexico due to drought. Anticipated heavy rainfall may improve conditions. Despite mixed demand signals, feedstock prices like ethylene and benzene are on the rise, potentially leading to price increases.
Acrylonitrile butadiene styrene (ABS) availability is tight, with rising feedstock costs due to production issues and higher summer demand. Ineos Styrolution and Sabic remain on force majeure in Mexico, which, combined with expected rainfall, could influence pricing.
Key Takeaways
• PE: Inventory up, demand down, possible June price increase.
• PP: Inventory down, exports up, price increase likely.
• PS: Tight supply, potential price hikes, watch feedstock costs.
• ABS: Tight supply, rising costs, price increases expected.
Feedstock and International Trends
Ethylene and benzene prices are climbing, affecting costs across markets. In Europe, PE and PS markets saw price reductions, while in China, trends varied by material type. For PVC, strong export demand and limited supply from Mexico are pushing for price increases, while PA66 and PA6 markets face sluggish demand but potential cost hikes due to higher feedstock prices. PET demand is expected to rise due to the summer season, with supply pressures from Mexico supporting price increases.
Action Strategies
Monitor logistics and supply positions closely, particularly during the hurricane season. Be prepared for potential price increases driven by higher feedstock costs and supply chain disruptions. Stay informed on international market trends to adjust strategies accordingly. For more detailed information, consult the full RTi report or contact the respective analysts.
Matium at the Maryland Recycling Network Conference
Last week, the Matium team attended the Maryland Recycling Networks (MRN) conference held at the Turf Valley Conference Center in Ellicott City, MD. The event brought together industry professionals to discuss the latest trends and challenges in recycling and waste management, with a strong focus on Extended Producer Responsibility (EPR).
Highlights from the Conference
One of the key themes at the conference was the implementation and impact of EPR in Maryland. Various speakers highlighted the importance of this policy in improving recycling rates and reducing waste. The discussions were particularly relevant given Maryland’s recent legislative efforts to establish a robust EPR program. This program, mandated by Senate Bill 222, requires a comprehensive needs assessment to understand the state’s recycling and waste management capabilities before detailed EPR rules can be finalized.
EPR and the Future of Recycling in Maryland
EPR is seen as a crucial step in ensuring that producers take responsibility for the lifecycle of their products, from design to disposal. The goal is to create more sustainable and circular economies by incentivizing manufacturers to design products that are easier to recycle and have less environmental impact. At the conference, experts shared insights on how similar programs have been successfully implemented in other regions, providing valuable lessons for Maryland.
Matium’s Role and Support
Matium is committed to supporting Maryland’s transition to a more sustainable recycling model. Our team is equipped to assist with the upcoming needs assessment by providing expertise in digital supply chain infrastructure and sustainability reporting. We can help identify gaps in current systems and propose technology-driven solutions to enhance efficiency and compliance with EPR requirements.
Moving Forward
As Maryland moves forward with its EPR initiatives, it is essential for all stakeholders, including local governments, businesses, and recycling organizations, to collaborate closely. Matium looks forward to being an active participant in this process, contributing our knowledge and resources to help achieve the state’s sustainability goals.
Matium continues to see incredible growth throughout the Network! We are excited to continue to add features such as smart matchmaking to Network offers, the ability to make requests for materials needed and much more.