According to the industry association Flexible Packaging Europe (Germany), high prices and irregular polymer shipments are expected to continue or worsen in the coming months and could jeopardize the delivery of food and other vital products.
According to the Association’s Executive Director, Guido Aufdemkamp: “The plastics industry should not take the end consumer hostage during these difficult times of the coronavirus pandemic, when the entire population is so dependent on a safe and stable supply of food and hygiene products, as well as medical and pharmaceutical products. We urge the plastics industry to work as closely as possible with their customers to resolve this unpleasant situation. ”
In its statement, the group referred to the high concentration of force majeure and maintenance reports from leading polymer manufacturers in Europe. It is noted that these actions led to sudden and significant shortages along with unnecessary price increases in the supply chain.
The association reports that in Europe, almost half of so-called consumer goods, other than beverages, are packaged in flexible plastic packaging, including food, pet food, and personal and household hygiene products, and almost two-thirds of the materials used to produce flexible packaging make up plastics.
Experts add that the ongoing volatile supply of raw materials, coupled with pressure from legislators and consumers to create conditions for “sustainable development”, is driving the trend towards material substitution. The warnings followed statements from other processors’ associations about the possibility of slowing operations and stopping supplies to finished goods stores.
Calls for more transparency
Françoise Andrés, president of the French national plastic packaging association Elipso (Paris), said that in the current situation, plastic packaging manufacturers are “fighting every day” to ensure the supply of products to their customers. She noted that stores must constantly reorganize their schedules and manufacturing processes in accordance with the latest information, or even delay deliveries.
The French association is urging its suppliers to pay more attention to the situation and the actions taken to end the crisis and resume the standard supply chain. To justify their measures, plastics manufacturers cite force majeure caused by winter storms in the United States, technical incidents related to plant upgrades, or production cuts due to COVID-19.
The pandemic continues to affect the cost of freight
As polymer prices continue to rise, so will the associated transportation costs. According to the European Federation of Wooden Pallet & Packaging Manufacturers (FEFPEB, Netherlands), further increases in prices for wooden pallets and packaging are inevitable as companies across Europe and the rest of the world continue to feel the effects of the pandemic.
The association said it expects sustained increases in the price of raw materials, including wood and steel, as well as availability problems in some markets, which will put upward pressure on prices for several months.
Polymer prices in Russia follow the global trend, and it seems that this cannot be influenced. However, for the local market under sanctions, there are examples of “manual control” to stabilize prices. For example, how it was implemented by law in 2018 in the fuel market, when, after gasoline prices soared, the government first froze them, and then launched a damping mechanism to stabilize companies’ revenues and support the stability of fuel prices in the domestic market, regardless of from fluctuations in the cost of oil in the world.
The Russian Union of Plastics Processors (SPP, Moscow) turned to the Head of the Government of the Russian Federation Mikhail Mishustin with a request to develop a regulatory and regulatory framework that would reduce the volatility of polymer prices and eliminate dependence on foreign market conditions by analogy with the laws regulating selling prices for fuel and socially significant goods.
The SPP believes that the selling prices for feedstock for the production of large-tonnage plastics, which are produced at the enterprises of the fuel and energy complex with state participation, are under the jurisdiction of the Government.