The market for semi-finished plastic experiences price increases never seen before
The development of the price on almost every kind of plastic is rising surprisingly heavy.
The reason for this is the lack of raw materials as a consequence of the global COVID-19 crisis where many raw material producers have chosen to empty their stocks and then reduce the production based on the prediction for a weak first quarter of 2021. Also lower demand for kerosene (aviation fuel) and petrol play a role in the production of the raw materials used for plastic products.
The development in the demand in Europe has however, surprised everybody and the demand from e.g. Latin America, where the raw material producers have been able to achieve higher prices than in Europe, has exacerbated the situation even more.
The situation with import of some kind of raw material from Asia has likewise been almost non-existing due to the high lack of containers and consequently the very heavily increasing freight prices. The situation with lock down of factories producing raw material in Texas, US because of the unusual hard winter has been aggravating circumstances.
This is a very toxic cocktail – the general lack of raw materials results in exploding prices.
Linda Naylor from I.C.I.S. (Independent Commodity Intelligence Service) is explaining about the situation with PE & PP in the video here
We are monitoring the market very closely in cooperation with our network worldwide and intend to update our customers on an ongoing basis. We are also working hard to ensure deliveries to competitive prices.
Therefore, we must inform you that we may be forced to implement unannounced price increases from day to day and therefore, you should check the prices before submitting binding prices to others.
Because of the situation, we are all ready by now forced to use daily prices for extruded PE, PP and ABS.
Your sales consultant or our customer support will of course be available regarding the situation and the latest development of the plastics market.
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