Elipso, the trade association representing French manufacturers of plastic and flexible packaging, is concerned about a new historically hike in prices of raw materials, in connection with the geopolitical situation and closures of refineries across Europe.
Since December 2011, prices of plastic raw materials are experiencing a steady rise of 200 to 300 euros per ton (an increase of nearly 20%), as a result of the current geopolitical and economic situation (supply crisis in particular from Iran, rising prices of crude oil, weakness of the euro vs. the dollar). According to Elipso, this increase is also fuelled by the reduction in the refinery capacity in Europe due to the failure of some refineries and of their steam crackers. The offer on naphtha and its derivatives, particularly ethylene and propylene, is thereby greatly reduced.
The trade association expects that prices will reach a historic high in March. Indeed, while demand had remained low in February, the recovery planned in March will encourage an increase in resin prices. Only the reopening, after take-over, of some refineries in Europe, and a possible easing of geopolitical tensions, particularly with Iran, would be likely to reduce the prices pressure.
"This uncertain future and this lack of visibility is creating an alarming and worrying situation for our businesses in Europe. Moreover, prices in Asia have remained at a lower level and are not likely to be experiencing the same increases as in Europe. Manufacturers of Flexible Plastic Packaging whose activities, at the start of this year, are conducted in a context of economic crisis are very concerned about this sudden and unavoidable change in the prices of their raw materials which increases manufacturing costs and weakens their competitiveness, particularly versus Asia," expressed Elipso in a concerned communiqué.
The trade association therefore calls for "a greater responsibility of the sector," wishing "that upstream producers of resin remain reasonable and that downstream packaging users are able to absorb additional costs due to price increases, especially as the profession’s efforts in terms of eco-design and lighter packaging solutions offered have enabled significant savings."
