Plastic raw materials increase their price by 50% in three months

plástico azul
16 February, 2021

The plastics transformation companies (manufacturers of the product) both in Spain and in the rest of Europe have been observing a significant increase in the price of raw materials for several months, a circumstance derived from the shortage of supply that causes delays in production and in delivery of orders.

This is a situation of polymer shortage for the plastics transformation sector in Europe, very similar to that which occurred in the first half of 2015. Something that affects more than 60,000 companies in Europe and more than 3,000 companies in Spain alone 98% of them being SMEs.
Since the end of 2020 there has been an alarming increase in declarations of force majeure by manufacturers of raw materials, especially in relation to the supply of polyolefins and PVC, which makes it difficult for plastics processing companies to access the material necessary to maintain its production.

Anaip warns that this shortage of supplies could affect the supply of products considered essential, especially in the current context of pandemic, in addition to causing irreparable damage to the processing industry.

The shortage of polymers makes it increasingly difficult for transformers to purchase the necessary raw materials at reasonable prices, and given the amount of increases they are forced to pass on the price increases to their customers. Furthermore, using raw material suppliers outside the European Union may further increase the price of the product for the consumer, due to the tariffs established for these products, including those for essential products.

This circumstance is especially complex if we take into account that the vast majority of plastic processing companies are SMEs and micro-SMEs, specifically in Spain we speak of 98% of the more than 3,000 companies, and that, in addition, they are located in the center of the value chain, that is, between the producers of raw materials, which are few and very concentrated – less than 20 across Europe for all the different plastic raw materials – who are not meeting the demand, and the customers, who start to raise possible contractual sanctions.

In this emergency situation, Anaip will once again insist on the institutions with responsibility in these areas in order to take urgent and structural action so that situations like this are not repeated and the market is served in free competition.

On the other hand, EuPC – the European Association of Plastic Transformers, of which Anaip is a member – created the Polymers for Europe Alliance with the aim of building and maintaining good communication between the value chain in Europe and to be able to better monitor the declarations of force majeure from the producers of raw materials around the world.

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