A European plastics group is warning that material shortages in the region could prompt processors to shift production away from the area.
The Brussels-based European Plastics Converters Association (EuPC) has said that the recent series of force majeure declarations by some leading polymer suppliers to the European market could have damaging effects.
“We are receiving reports from our major national associations that compounders and processors are experiencing difficulty in obtaining adequate supplies of polymer to discharge contractual obligations towards their customers', said Alexandre Dangis, EuPC's managing director.
“This is particularly damaging at a time when many EU states are trying to claw their way back to recovery and in particular when the EU plastics industry is in such a great position to be in the vanguard of growth with its potential to deliver customers and broader society carbon savings and resource efficiencies.
“I am afraid', he added, "that the force majeure could well lead to processing companies departing the EU to re-establish themselves in Asia where on the face of it a more favorable polymer supply situation persists.”
Dangis continued: “shortages spell out increases in polymer prices which will need to be passed on down the customer chain. For plastics packaging manufacturers, as an example, the raw material component of the selling price of a pack accounts for as much as 60 percent. If increases on this cannot be passed on; this places the very viability of the manufacturing companies at serious risk.”
Meanwhile in the United Kingdom, the British Plastics Federation (BPF) has warned that plastics processors are currently facing shortages of key materials.
“There has been a spate of force-majeure declarations, reminiscent of 2010,” said Director-General Philip Law. “It certainly appears that some processors, of particularly [low density polyethylene], [liner low density PE] and [high density PE], are on allocation. This threatens their ability to fulfil contracts.
“It is important for their customers to recognize that they have genuine difficulties. This is not just a U.K. issue it certainly affects France, Germany and Italy.”