Plastic converters across Europe are experiencing increasing difficulty in getting the necessary material to keep their production running, while stocks are running alarmingly low.
Global shortages of raw materials are starting to make their impact felt at processing companies around the world, and Europe is no exception.
According to European Plastics Converters (EuPC), the professional representative body of plastics converters in Europe, the sharp drop in demand for raw materials seen in the first half of 2020 reversed itself in the second half, with demand picking up again as production regained momentum. The raw materials supply, however, failed to keep pace.
Since December, the situation has worsened rapidly, EuPC Managing Director Alexandre Dangis said.
"Additionally, extreme weather conditions in the U.S. led to production losses also affecting the European market. In addition, European producers have also been declaring increased numbers of force majeure cases in the past months, as the Polymers for Europe Alliance reported already in January," he said. The situation has been further aggravated by shortages in shipping containers.
As a consequence, prices have skyrocketed. Record high prices both hinder the credit prospects of and dramatically reduce the very tight small margins of converting companies.
"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," EuPC President Renato Zelcher said. "If the situation continues like this, more and more companies will have to reduce their production, leading in return to shortages of plastic products such as food packaging or parts for the construction or automotive industry."
EuPC has called on its partners in the European polymer manufacturing industry to work together with their European customers to try and resolve this difficult situation as soon as possible in order not to put supplies of essential goods in danger.