UPDATED — For the third time this year, major polyethylene film makers are seeking non-resin price increases for their products.
AEP Industries Inc., Sigma Plastics Group and Berry Plastics Corp. each recently have sent letters to customers indicating price increases effective Dec. 1. Hackensack, N.J.-based AEP and Lyndhurst, N.J.-based AEP each are seeking increases of 4 percent. The increase amount cited by Evansville, Ind.-based Berry is 3-5 percent.
In the AEP letter, Chairman and CEO Brendan Barba said that continued rising price pressure on freight, energy, healthcare and other non-resin-related costs “have been unprecedented.”
“While AEP continues to make huge strides in manufacturing efficiencies to offset these cost increases, it's not always possible to achieve when those costs are significant and mount up quickly,” he said.
Similar increase attempts in May and September met with mixed results. PE film makers also are dealing with a steady rise in PE resin prices. Since late 2012, North American PE resin prices have seen six price increases — totaling 23 cents per pound — without a single decrease. That's different from historical pricing patterns where increases would be partially offset by decreases in the course of a typical year.
AEP, Sigma and Berry each are among North America's 10 largest film and sheet makers, according to Plastics News rankings.
Film extruders Intertape Polymer Group Inc. and Mid South Extrusion Inc. also have announced similar increases. Bradenton, Fla.-based Intertape is attempting to raise prices by 4 percent on all stretch film orders placed on or after Dec. 1.
In a letter to customers, Intertape President Greg Yull said that the increase is needed “for IPG and, frankly, the industry to be a sustainable supplier in these product areas.”
Mid South CEO and President Ron Mason said an a Nov. 19 phone interview that his firm had never attempted a non-resin increase before, but now is seeking 3 cents per pound on orders placed on or after Dec. 15.
Mason added that his Monroe, La.-based firm had not seen any change in price from the earlier increase attempts made by other companies. He said Mid South has seen its costs rise for transportation, packaging and health care, as well as in labor, where wages have increased.
“It seems like film companies are always lagging behind the [resin] price increases,” Mason said. “We're always catching up.”
Intertape was 23rd in the most recent PN ranking, while Mid South checked in at No. 68.
These non-resin price hike attempts for film might be challenged, however, by recent drops in price for oil. Global oil prices have tumbled more than 25 percent since September, leaving U.S. oil prices at just under $76 per barrel in late trading Nov. 20.
This drop has led many PE buyers to expect lower resin prices in November and December. That's because global oil prices impact PE resin prices, even though lower-priced natural gas is used in most PE production in North America and the Middle East.