Portable Sanitation Association International

Association Insight April 14, 2021

Issue link: http://psai.uberflip.com/i/1361593

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ASSOCIATIONINSIGHT Portable Sanitation Association International News BIWEEKLY EDITION APRIL 14, 2021 Page 2 Supply Issues Create Challenges and Opportunities…continued from page 1 Continued on page 8 Understanding the Shortages Many supplies on which the portable sanitation industry relies are petroleum-based. For example, the high density polyethylene (HDPE) and related materials used to make restroom units, hand wash stations, and other portable sanitation equipment are currently very difficult to get. As a result of the scarcity, prices for plastics and related products have spiked in recent months. The chart at left depicts information from the Independent Commodity Intelligence Services (ICIS) for the largest global plastics markets. As is evident in the data, pricing changes are dramatic all over the world. The reasons behind these shortages boil down to (a) demand changes, (b) difficulty getting the petroleum-based raw materials, and (c) production issues. Demand changes for all sorts of petroleum-based products are occurring due to the global economic consequences of COVID-19. In the portable sanitation industry, we know that more people want hand wash and sanitizer stations than ever before. Companies seeking to increase their stock of this equipment go to suppliers who are competing with everyone else on the global market trying to buy the same raw material. For example: The booming construction market. According to Oil and Gas 360: "The materials to build roads for transportation across the nation as well as the fabrication of homes is only possible with products created from the oil and gas industry. In fact, almost all products used in road construction and roofing are byproducts of crude oil. From asphalt and tar to shingles and caulking, construction materials made from residual/residue crude left over after the refining process are the backbone of many construction materials." The impact of the pandemic on the demand for medical supplies. Consider all of the throw-away plastic items associated with the PPE that has been, and will continue to be, needed in healthcare facilities and other job sites. Face shields, ventilator parts, tubing, and the like just scratch the surface. Then think of all the syringes with plastic components being used globally to vaccinate billions of people one or two times each. Even those face shields your team has been wearing for the past year come from the same plastic resources. Changing consumption patterns related to the millions of everyday uses for plastics. Since COVID, people have adjusted their purchasing and usage of many items with petroleum origins. From grocery bags and soda bottles to kayaks and car parts—the makers of all of these products are attempting to draw from the same limited resources. Meanwhile, petroleum production has to adjust so that oil being pumped from the ground is better aligned with the increased demand. Our March 31 issue of Association Insight covered how the oil and gas industry is in the process of modifying its production globally. Generally speaking, we expect gasoline prices to continue to rise at least through the summer of 2021. It's just one more product made from crude oil, the demand for which is not currently matched to the available supply. Average Price Increase March 2020–March 2021 US NW Europe NE Asia Polyethylene 68.0% 71.0% 84.5% Polypropylene 143.2% 51.2% 61.1% Propylene 150.1% 28.5% 59.4% Methanol 26.5% 58.6% 50.9%

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