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European manufacturers hit by soaring prices of resins used in the manufacture of plastics

Thousands of European manufacturers have been hit by soaring prices for polymer resins used in the manufacture of plastics. This was the highest in six years due to strong supply and demand slumps.

High prices can add to supermarkets, other retailers, and consumers as they reduce the margins for companies converting plastic resin to a variety of household and industrial products.

According to market information service ICIS, the prices of the most commonly used plastic resins, polyethylene and polypropylene, have risen 25% since December to € 1,500 per ton, the highest level since 2015. It has become.

Ronmarsh, head of the European Alliance for Polymers, said market liquidity is also depleted due to very low supply and a “catastrophic effect” on the industry.

“Some plants are out of material, some are in good stock, and some are soon depleted,” Marsh said.

Renato Zelcher, CEO of Italian polyethylene maker Crocco, emphasized the crisis facing the industry when he warned that the increase would “disaster” the company’s performance.

There are about 50,000 small and medium-sized plastic processing companies in Europe that turn several types of plastic resin into food packaging products, plastic bags, plastic films, containers and bottles.

The shortage of huge plastic bags used to mix pharmaceutical ingredients also threatens the rollout of Covid-19 shots worldwide, as another example of the importance of synthetic materials.

Plastic prices in Europe were the lowest in the world in most of 2020, but have skyrocketed in recent months due to shortages and strong demand.

The rebound of crude oil derived from plastic resins also spurred upward pressure on prices.

Long-term contracts mean that manufacturers haven’t passed on high costs yet, but Zelcher warned: Otherwise you will go bankrupt. “

“The pressure of months of rising prices is [plastic] The converters are huge, “said Marsh of the European Alliance industry group Polymers.

The shortage of plastic resin is also worrisomely reducing inventory.

“If supply continues to be tight, supermarkets can run out of food packaging products,” Marsh added.

Products that have experienced increasing demand include polymer-based hygiene products such as gowns and face masks, as well as numerous online products.

US exports of polyethylene to Europe fell sharply in the fall following the September hurricane season that hit the refinery. Imports to Europe are further delayed due to a shortage of shipping containers.

According to ICIS, the supply crisis intensified at the end of the year as demand in Europe, which relies heavily on US imports, began to recover.

ICIS analyst Lorenzo Meazza said European manufacturers were “buying only what they needed” in early fall, “because of uncertainty about when the next blockade would be.” It was.

“By November and December, demand in Europe began to improve,” he continued. “But the limited supply meant that Europe suddenly really ran out of polyethylene.”

European manufacturers hit by soaring prices of resins used in the manufacture of plastics

Source link European manufacturers hit by soaring prices of resins used in the manufacture of plastics

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