The plastics industry is evolving rapidly due to shifting market trends, regulatory changes, and new technologies. In this edition, we explore AI-driven energy demand, pharmaceutical supply chain challenges, and Costa Rica’s growing role in medical manufacturing. Plus, get the latest insights on polymer pricing, supply conditions, and market trends to stay ahead in this dynamic landscape.
MARKET SPOTLIGHT
Electrical and Electronics
U.S. Energy & AI Surge: Over the past 10 years, U.S. energy production has increased by approximately 10 quadrillion BTUs, with data center energy demand expected to grow 2-3x by 2028. This surge is driving exponential growth in demand for breakers, switchgear, cabling, power management, and high-voltage connectors. 1
AI’s Heat Challenge: AI chips generate between 700-1400W of heat, 7-10x more than a traditional 100W lightbulb, which pushes the limits of lower-temperature plastics. This surge in heat demands more robust fans, HVAC systems, power cords, cable management, and high-performance connectors to ensure reliability and efficiency. 2
Healthcare
The GLP-1 market is booming, with these injections becoming a standard prescription for obesity. While this rapid growth presents significant opportunities for pharma, it also brings challenges in product delivery and patient experience. As a self-administered injectable, GLP-1 requires manufacturers to collaborate closely with supply chain experts in an effort to ensure safety, ease of use, and reliability. Smart packaging solutions may be the key to staying ahead in this competitive market, which is seeing increased demand for autoinjectors and syringes. 3
The Healthcare Distribution Alliance (HDA), which represents pharmaceutical distributors, warns that impending U.S. tariffs on pharmaceuticals could disrupt the supply chain, increase drug prices, and potentially push manufacturers out of the market. With tariffs set to take effect on March 4, the industry faces mounting challenges in ensuring stable and affordable access to medications. 4
Costa Rica continues to grow as a medical hotspot as the country emerges as a premier hub for medical technology. As of March 2024, more than 80 companies in Costa Rica are producing healthcare and biopharma products, with the medical device and technology industry now accounting for $5.2 billion and 36% of the nation’s total trade—making it the country’s largest export. 5 With medical device manufacturing expected to continue expanding into 2025 and beyond, Costa Rica presents a prime opportunity for companies looking to strengthen their presence in this thriving market.
PRODUCT NEWS
Polypropylene
PGP was up $0.04/lb. in February. CDI and CMA both reported out up $0.04/lb. as well.6,7
CDI is estimating that PGP will be up $0.01/lb. in March and down $0.02/lb. in April.6
Some suppliers have issued price increase letters for March at $0.02/lb.-$0.03/lb.
ACC and CDI report operating rates at 72.3% and DOH at 40.6 days in January. Operating rates increased by 4.5% and DOH decreased by 2.9 days from December. 6,8
Export9: Canadian producer Heartland has resumed operations, which may impact the PGP market balance in the U.S. Gulf Coast.
U.S. exports experienced another weak month in January as prices are uncompetitive. U.S. export volumes decreased by 14.3M lb. in January 2025 compared to December 2024.
Mexico9: February demand improved but was constrained by high market uncertainty created by the looming potential tariffs. Buyers have adopted a wait-and-see approach for new transactions as they await reports on new developments and possible reciprocal Mexican tariffs.
U.S. PGP spot prices are trending downward prompting buyers to purchase minimal volumes, as they anticipate lower future prices.
Attractive Asian offers below $0.45/lb. CFR Manzanillo introduce new competition.
Local producer Indelpro production is steady and prices matching that of imported resins.
Polyethylene
PE settled flat in February. CDI and CMA both reported flat as well.6,7
CDI is estimating PE to be flat in March and flat in April. 6
Suppliers have issued price increase letters for March at $0.05/lb.-$0.07/lb.
ACC and CDI report operating rates at 87.9% (varies by segment) and DOH at 54.2 for all of PE in January. Operating rates for all PE decreased by 8.8% and DOH increased by 9.1 days (all PE) from December.6,8
Export9: U.S. PE exports set a new record for January 2025, exceeding 2.9B lbs., surpassing the December 2024 record by nearly 22M lbs. Much of the January 2025 export volume is likely from products delayed at warehouses and packaging facilities since December 2024.
February saw weaker export demand, but an increase is anticipated in March, as traders expect a rebound in orders from foreign buyers.
The market is optimistic about more stable export prices in March compared to February, likely stimulating additional transactions with LATAM and Europe.
Export warehouse and pack-out facilities are now operating normally, with volumes expected to flow smoothly.
Mexico9: Uncertainty in Mexico's PE markets is limiting activity, with buyers only purchasing necessary volumes due to tariff concerns. Tariffs could impose a 25% charge on resins and finished plastics, affecting most of the Mexican PE market.
March shipment offers are generally flat. HDPE HMW and LDPE GP film dropped $0.01/lb, while LLDPE butene increased by $0.01/lb. due to limited availability.
Braskem Idesa's production is running regularly on three lines, accumulating inventories in preparation for a planned shutdown.
ABS6
Demand for February is mixed; some markets see improvement while others continue to have January lull.
Contract prices in January finalized flat. Prices in February are forecasted to roll over from January.
February freight rates see a decrease from January.
The price gap between domestic ABS and imports sees a slight decrease.
Polycarbonate6
PC February contract prices roll over from January.
PC demand continues to be weak in many application sectors, especially in automotive.
PC market is oversupplied in the U.S.
U.S. PC exports are predominantly to Mexico and Canada.
Tariff uncertainty looms for Mexico and Canada.
Polystyrene
February contract prices expected to roll over from January.8
Soft demand keeps feedstock spot prices lower this week.6
March contract price nominations expected to be at an increase.6
TPE
February demand is weak, especially in Automotive.
Pricing remaining stable for general purpose TPE.
Tariff uncertainty looms for Canada and Mexico for U.S. produced TPE.
Price increases on Flame Retardant grades due to Antimony Trioxide trade restrictions from China.
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