High PS prices put packaging companies under pressure

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Hispalois, under a Creative Commons licence A yogurt container made from polystyrene.

Representative bodies for European plastic packaging producers have warned of high polymer costs they are facing in the first half of 2017, particularly for polystyrene (PS).

The situation was described as “dramatic for processing companies” by Elipso, the French plastic and flexible packaging association, and IK, Germany’s plastic packaging organization.

A surge in the price of styrene monomer since the fourth quarter of 2016 has led to the price of PS and expanded PS reaching an all-time high in February, as reported by Plastics News Europe in its February price report. Plastics News Europe is a sister publication of Plastics News.

Elipso and IK said in a joint statement that PS production capacity has been reduced by a high level of maintenance work being carried out at plants in North America and Asia.

“These uncertainties are taking effect all over the world and it is currently impossible to predict a turnaround,” the organizations said, adding that the two groups “are therefore forecasting high raw material prices for the first half of 2017.”

They called on integrated producers of PS to urgently address the situation.

“Sound economic judgment is vital when considering the way forward,” said Elipso and IK. “After all, the companies processing polystyrene and EPS plastics are coming under increasing financial pressure. In view of the already tight margins, the aim should be to safeguard the existence of the [processing] companies and their innovative strength. Fortunately, increasing numbers of [processors’] customers understand that the situation is beyond the control of their suppliers.”

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