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Polymer converters fear raw material and price squeeze

Polymer simulation made with QuantumATK asoftware.

Demand for polymers recovered in Europe in the second half of 2020 after a strong drop in production due to the Covid-19 pandemic and the corresponding lockdown measures. Even so, while plastics converters increased production, ‘the supply of raw material did not grow accordingly’ reports trade organisation European Plastics Converters (EuPC).

Since December, EuPC adds, the situation worsened rapidly and extreme weather conditions in the USA led to production losses that also affected the European market. EuPC managing director Alexandre Dangis notes that more European producers have also been declaring force majeure in recent months, as the Polymers for Europe Alliance had reported in January.

The situation is further aggravated by shortages in shipping containers. As a result of all these factors, Dangis says, prices for polymers have risen sharply, reaching record-high levels, limiting credit facilities as a consequence and ‘dramatically reducing’ the tight margins of converting companies.

According to EuPC president Renato Zelcher: ‘There are about 50 000 small to medium plastic converter companies in Europe, which have to face the raw material shortages and significant price increases without any leverage in the negotiations with multinational polymer producers. If the situation continues like this, more and more companies will have to reduce production, leading in return to shortages of plastic products such as food packaging or parts for the construction or automotive industry.’

EuPC is calling on its partners in the European polymer manufacturing industry to work together with their European customers to try to resolve this difficult situation as soon as possible in order not to put supplies of essential goods in danger.

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