“The market is tight.” Every resin buyer has heard it. It’s the single most common justification suppliers reach for when pushing price increases, defending allocation programs, or explaining why your lead time just doubled.
Sometimes it’s true. But often it’s not—or at least not in the way the supplier is implying. And the buyers who can independently verify tightness claims end up negotiating from a fundamentally different position than those who just take the supplier’s word for it. And that’s a good spot to be in.
At its core, tightness means demand is outpacing available supply in a given period. It’s not a feeling. It’s measurable, and here are the signals that confirm it:
The point is straightforward: suppliers use tightness as a feeling. Buyers, however, should treat it as data.
When tightness is genuine, you’ll see these signals converge. Operating rates push above 90%. Inventories draw down for consecutive months. Force majeures pull capacity offline. Export demand drains the domestic market.
Summer 2024 was a textbook case. Hurricane season pre-buying combined with strong exports and reduced production to create legitimate supply pressure. PE inventories drew down more than 330 million pounds over two months. Spot prices firmed accordingly, and allocation programs kicked in. In that environment, the data backed up what suppliers were saying.
That’s the key distinction. When tightness is real, the data confirms it fast. ACC supply/demand figures, spot price movements, and allocation announcements all align. There’s no ambiguity to hide behind.
Manufactured tightness, on the other hand, looks very different. Instead of responding to demand, suppliers constrain output to manage the supply/demand balance in their favor. They run reactors at low rates, limit spot availability, and hold inventory rather than release it to the market.
Late 2024 into early 2025 clearly showed this dynamic. PE producers ran reactors below 70% in Q4, drawing down roughly 250 million pounds of inventory. On the surface, that created the appearance of tightness. But demand was actually soft. Producers used the self-imposed supply reduction to support price increase nominations for January and February.
The tell was in the details. Industry analysts noted that resellers’ inventories were thin while overall supplies were actually plentiful—producers simply hadn’t released material to the spot market. The market “felt” tight. The fundamentals, however, said otherwise.
Put simply: if inventories are building at the producer level but spot availability is scarce, someone is holding material. That’s not market tightness. That’s supply management.
The good news is you don’t have to take anyone’s word for it. Here’s what to check:
And beyond the data, there’s a simpler litmus test. Ask your supplier directly: “What are your current operating rates and inventory days?” Their willingness to answer—or dodge—tells you quite a bit on its own.
“Tight market” is ultimately a narrative. Supply and demand data, however, is fact. And buyers who can distinguish between the two strip away the supplier’s strongest justification for above-market pricing.
ResinSmart gives procurement teams real-time supply/demand intelligence that verifies or disproves tightness claims before your next supplier conversation. In other words, we level the playing field for buyers. Want to learn more? Then schedule a demo and stop taking “tight supply” at face value.