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Potential East & Gulf Coast Port Workers Strike Looms Over Resin Markets
Labor contract negotiations for East Coast and Gulf of Mexico port workers have stalled creating the potential for a shutdown of major ports including Houston, TX which is significant for the resin market.
About 45% of all North American Polyethylene sales are shipped to international destinations with the Port of Houston used as the primary export shipping hub. A worker strike at the port, which could come as early as October 1st, would back up resin awaiting shipment and could wreak havoc on the resin markets.
If an agreement cannot be reached and a strike ensues, supply chains would be impacted and result in the US domestic resin market flooded with material destined for export, potentially leading to sharp price declines. Houston area warehouses would also quickly fill to capacity, leaving packaging lines backed up with limited places to store material, and likely cause significant rail traffic congestion.
In addition, containers stuck at the port would face high per diem charges for chassis and / or storage fees, raising the total logistics costs for these containers of material. Export transactions are typically booked on thin margins and containers trapped in transit would surely turn unprofitable if a strike were to drag on.
Container bookings would need to be rolled forward or canceled until a resolution is found causing extended delivery times, impacting international resin processors who rely on the timely delivery of their resin. Container ships would be stuck at the US ports and the delays would reverberate through destination ports and beyond.
Stay tuned for further updates with hopes that a strike can be averted.
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