We want to address the recent increases in plastic prices and how that will affect sewer lining and excavation.
In 2020 and so far in 2021 there has been a large increase in costs for PVC plastic and piping which is the standard material used in excavation work in sewers. One source reads that “Plastic News reported the fifth consecutive month of PVC price increases, totaling a 20-cent per pound jump since June.” With the increase in PVC plastic going up 10-15% many people are asking what is causing this increase and what will its effect be on the markets that depend on this type of PVC plastic.
Researches have shown that the spike in prices is caused by “global constraints on feedstocks and some resins, coupled by continued strong demand in most cases.” The feedstock is referring to the “raw material that is required for some industrial process.” The demand for plastic and the recent unprecedented winter storm that hit the Gulf Coast in mid-February are the leading culprits in the spike in plastic costs. Around 80-85% of the production of key feedstocks and resins were shut down because of the winter storm and now production cannot keep up with the demand. Before the winter storm, 80-85% of production sites for PVC plastic were also not running or running at a limited capacity due to COVID.
What does this mean for companies that rely on PVC plastic?
Since the prices are rising for PVC plastic one can conclude that the prices for work involving PVC plastic will also rise. The industry has seen a 20-cent/lb rise since June of 2020 and may continue to see a rise unless the supply-demand of this plastic becomes more equal. Plastics Technology also noted that we could see another 2-4 cent/lb increase in the price of PVC plastic in April. Sewer Companies that rely solely on excavation work using PVC plastic will begin to raise prices because the supply of PVC plastic is limited. Plastics Technology also noted that the production of PVC plastic had outages before the mid-February winter storm which explains the 20 cents/lb increase since June.
What does this mean for Sewer Renewal Specialists?
The resin that we use as a company for our lining has only risen 2-3 percent which means we will be able to operate normally without drastic rises in prices. Our Cured-In-Place Pipe uses a type of resin that does not impact the environment in ways like plastic and therefore is more environmentally friendly. Our prices may rise with our competitors but unlike our competitors, we will always first try to see if we can use a Cured-In-Place Pipe so that we can keep costs down, be as environmentally friendly as possible and provide the solution that causes the least amount of disruption to you. As we noted earlier the Cured-In-Place Pipe is the best option to cause the least amount of disruption, but sometimes some solutions require excavation and with our top-notch excavation team, you will receive the best quality.
We as a company will always work to get you the most cost-effective and, most environmentally friendly solution while keeping quality at the forefront of all the work we do.
We know that price and quality matter to our customers and we want to bring you the best of both worlds.