Ron's January/February 2024 Market Review

Resin Market


When you believe the market trend is pointing to a down market; when one major index publishes down and then republishes after its new master, IHS, publishes flat, then we are all beholden to the power of supply and demand. 


Then the following month, that same index publishes flat, all while IHS is going up 5 cents. I know! You are more confused than when you watched Pink Floyd’s THE WALL without using any type of substances. 


Maybe the deep freeze harkened back to those cracks in the pipelines from years prior. Maybe a war in the middle of Europe keeps marching on with no end in sight. Maybe a new war in the Middle East is spreading and damaging the Red Sea routes and the passage through the Suez Canal. Maybe the lack of water in the Panama Canal is truly holding liners from getting to the East Coast. I don’t know; I am trying to watch the news less. However, resin, like a fresh batch of buttermilk biscuit dough, is going to rise. 


The major manufacturers have all pressed for a fresh increase for February and we are already paying the January increase. Hence, why all of us film producers came out with a speedy increase letter and a date that wasn’t much of a warning. I can only tell you that the increase is really happening and my magic 8 ball with too many shakes reads, “Dude, still the same answer!” It also will say, “Sweet, dude, what does mine say”.  

Paper Market

For so long, the paper market has been dealing lower prices from contracts until, finally, all the major URB suppliers announced increases. Would it be fair to say that they are inspired by the liner folks who are pushing major increases? 


I know this much, my box prices are supposedly going up, or so I’m told. URB manufacturers have adjusted to Greedenomics, their boardroom, and stockholders are saying, “We don’t make enough”. They are wanting more, and with the inflationary spikes in labor, freight, and energy, they are seizing on this new year to get it. Sonoco, who puts the “no” in Sonoco, like the Grinch taking Christmas presents from the people of Whoville, announced in December that they would be going up on February 1. All the other major mills followed, which if you didn’t know, most of the capacity in the USA is held by 3 major firms. They are all pushing the increase and I don’t think they will let this one go. 


Since I was warned by the 8 ball about shaking anymore, I will tell you from my own belief - since there was no increase in RISI, I think it’s less certain than the outcome of the Titanic movie. Spoiler alert, if you don’t know how the movie turned out, Rose didn’t share the door with Jack and he is forever young now.

Ron's view: 

Can you even believe that January is in the books?  I have taken 5 Spanish classes, been to the gym 8 times and I have held up fairly well in trying to conquer my inability to sleep without the use of melatonin or ambien.  In an effort to get more restful sleep, I am required to turn off the news.  I try to read more, take longer walks and settle my mind.  I even tried a yoga class, which was a first for me, and doing mild stretches made me sore for a week.   I don’t know if you know this, you aren’t supposed to talk in a yoga class, where all of this breathing and resting in one spot wasn't good for a guy who has never sat still in his life. “Namaste”.  


In reflecting back, we truly had much to celebrate in 2023.  It has been a hard year but a wonderful year.  Alliance Plastics was fortunate.  Thanks to our amazing staff, and our incredible distributor partners, we were able to celebrate our highest revenue year ever.  We added capacity in blown stretch film (finally, 3 months late) and we added a new stretch film extrusion line in our Wisconsin facility.  We gained and we lost some of our beloved team members along the way.  We added new and talented people who are helping us go to the next level in 2024.  We added 6 new products to our film offering.  We also added a new EdgeGuard offering in DX Lite.  It is available now:  call your sales representatives.  We saw an explosion of growth in our Titanium Film lines and we found out that it has become invaluable for some of our clients as they rely on our product to hold their precious cargo.  


We recommitted ourselves to being that company with a heart.  My father told me that governments and businesses were ways for human beings to treat others inhumanely.  I never felt that way when it came to our foundation and vision.  Our company was based on our commitment to you, our distributor partners, and to our team members who believed our mission.  Our collective hearts beat for one reason.  We do the things we do, because no one else does what we do, and the competition won’t do it.   We do it for the right reasons.  I mean it, we want to make stretch film disappear from the earth and turn into plant food.  We bought our own recycling line so we can take film back and turn it into higher end PCR and PIR creating our RENEW films that greatly cut down the carbon impact of our industry, and giving you a high end film further lowering your carbon footprint.  


We are blessed that you allow us this mission and we will not rest until we complete it.  And when we do complete that mission, we will have a new one, and then another one,  because we believe that the status quo “sucks”.  We believe that if you are not innovating, then you are not relevant and you are not giving your partners what they need to be different.  One of my friends told me that a competitor of mine walked in and said, “whatever you are paying, we can beat their price”.  I find it amazing that they never talked about quality, technology, innovation, or service.  When you are only on a mission to make money, you lose the energy that ignites your fire.  It’s why we didn’t sell to private equity or become a cog in some holding company.  Yes, 2023 was a challenging year in many ways, and 2024 seems to be shaping up to be one as well.  We will have to suffer through thousands of political ads.  We have to suffer through another game with the KC Chiefs (Taylor Swift’s boyfriend) in the Super Bowl.  We have to listen to economists guess at the numbers on charts and realize that maybe they don’t know everything as they were so wrong about things like inflation, monetary supply, and geopolitical issues. 


However, partnering with our team, you will find a partner that gives you new and fresh ideas, and with so much heart  that it might make all that suffering seem a little less.  So, cheers to all of you and may 2024 be even greater.  Thank you from the bottom of our hearts for all that you have allowed us to accomplish in 2023. 


 





Ron Grubbs, Jr.
President

Alliance Plastics

2805 Commerce Dr.,

Rock Hill, SC 29730

888.643.1432 

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