Price increases for plastics and production shutdowns

Price increases for plastics and production shutdowns

Since the beginning of 2021, price increases are at 70%

Manufacturers of plastic packaging are currently struggling with various adverse effects. Prices are rising in all segments, including plastics. In addition, shortages are exerting additional pressure.

A fifth flash survey was conducted among the members of the IK Industrievereinigung Kunststoffverpackungen in May. This clearly shows the extent of the problems facing the industry. Price increases have reached 70 percent since the start of 2021, while rising transport and logistics costs are also weighing on the market. IK CEO Dr. Martin Engelmann emphasizes, “The situation in the industry is and will remain extremely tense.”

67% affected by raw material bottlenecks

Raw material bottlenecks are experiencing a slight recovery, but they are still serious. A total of 67 percent of participants say they are impaired in their day-to-day business due to a very poor supply situation. In the previous month, this figure was still 80 percent. For the month of May, eight out of ten companies also stated that they had to slow down their production due to the shortage of raw materials. In addition, one in five said they would have to do so to a considerable to severe extent.

By the end of May, LLDPE and LDPE had recorded the highest price increases, at 75 percent and 74 percent respectively, followed by PP, HDPE, PE, PA, PS, PVC and EPS – each between 67 percent and 71 percent. It should be noted that in the meantime, the markups are significantly higher than the average values. Recycled plastics are also not spared from the price increases. Prices for recycled PP, LDPE and PS have seen an increase of over 50 percent.

Suppliers experience production losses

Engelmann continues, “The situation is further aggravated by the continuing very high number of force majeure cases by plastics manufacturers.” Currently, two out of three packaging manufacturers are still affected by production stoppages by their suppliers. Compared to April, the rate has even increased. Engelmann appeals, “Only if the suppliers describe the reasons for the plant downtime in a comprehensible and detailed manner can you count on understanding on the customer side.”

Source: www.kloepfel-consulting.com