Rising Prices and Inflation in the Polyester Resin and Glass Fibre Markets

he prospect of rising inflation has shaken the markets in the past few days. Cash injections into the market have seen a spike in construction activity, particularly in domestic real estate markets.

demand for resins and other glass fibre materials has increased – as have prices from manufacturers. Some of our manufacturers have no resins left to supply.

These costs have been passed on to Strandek – specialist installers of fibreglass based systems like flat roofs and bund linings. Steve Bowen, manager at Strandek, an approved installer of the Built GRP fibreglass flat roofing system, states that “increased demand from customers and increased prices have caused some issues with materials costs. However, they are a smaller fraction of our overall costs and we expect prices to return to normal by the end of the year.”

Increased demand for polyester resin in the automotive and construction industries is accelerating sales. Car manufacturers require high-performance components and are driving an increased need to produce anti-corrosive tanks and fibreglass surface linings coatings.

The Chinese economy emerging first from lockdown has led to an increase in the consumption of raw materials, including glass fibre and polyester resin. This has had a knock-on effect on some suppliers incurring huge price increases in their commodity pricing.

Glass Fibre Chopped Strand Matting

In regards to chopped strand mat, we have noticed that since late 2020 that demand was outstripping capacity and have seen increasing price hikes. There are a number of issues causing this, mainly the reduction in capacity by all the major reinforcement producers following the worldwide Covid pandemic in 2020. Standard supplies were expected to take up to a year to fully recover. However, it would seem that in the UK, as with the rest of Europe, demand has bounced back remarkably strongly.

Unfortunately, early in 2021 one of the two major reinforcement producers, Jushi, had a major issue with their 80 kiloton furnace (Egypt), which has further reduced capacity taken by the European market. Increasing volume demands from US and plant failures in Texas due to excessively cold weather has put further pressure on supplies, driving prices higher.

Polyester Resin 

As for the polyester resin, again a similar situation to the glass fibre was observed during 2020 where projected demand was much lower than that in reality. There was a significant downturn of capacity in the supply chain for the majority of the raw materials, which as we entered 2021 meant prices were moving upward.

This upward pressure was expected to soften as we went through Q1, as was seen historically. However, since the turn of the year, there has been a sequence of events that have increased pressure on raw material costs and restricted supplies from the polyester producer of these raw materials. Styrene and particularly maleic acid are causing producers major production issues, to the point where three fairly large resin producers have had to stop production one in the UK,  one in Europe and one in Texas (USA), the latter being due to cold and ice weather effects.

Along with the raw material issues, February also saw extreme weather in the US which halted production in several RM producers and shipments leaving for Europe.