packagingnews.co.uk

BPF warning over raw material supply problem

Davis: "customers must realise pressures members are under"

The British Plastics Federation has joined European colleagues to warn of the threat to the sector of raw material shortages and rising prices.

BPF director general Peter Davis said that while this situation was affecting the entire sector, packaging manufacturers were feeling it most due to the availability of polyethylene and polypropylene.

Just a week ago, the BPF's Business Conditions survey pointed to growing confidence in the sector.

"At the time that strong evidence of a recovery in companies' performance is emerging, it is extremely disappointing that companies lack the confidence to engage in business development projects due to faltering supply," said Davis.

The BPF echoes the view of the European Tube Manufacturers Association (Etma) and German plastic packaging federation IK that both warned that the current high raw materials prices were threatening the businesses of converters.

Timber packaging body Timcon and labelling group Finat have also made similar statements about price increases.

HDPE price increase
In the 12 months to May, the euro price of high-density polyethylene for blow-moulding rose by more than 30%, the BPF said.

Polypropylene rose by 50% for the same period.

The BPF said the situation was due to the faster than expected economic recovery and the surge in Chinese demand in particular.

Reduced European reduction

European plastics production is also set to reduce – cracker capacity in the EU is forecast to fall by 26% in the next five years. The trend is towards production in the Middle and Far East.

Peter Davis said: "It is extremely important that the end customer buying and using plastic products, whether food retailers or car manufacturers, realise the very real pressures that our processing members are under and reflect this sympathetically in negotiations with suppliers.

In March, the Packaging and Films Association (Pafa) warned of the need for "significant" price increases to offset raw material cost increases.