European converters are facing a severe shortage of raw materials as well as unprecedented price increases, according to EuPC.
This combination of factors is likely to have a detrimental effect on SMEs in the industry, as well as on products destined for applications in construction, automotive and food and pharmaceutical supply chains.
Europe’s converters face polymer shortage
EuPC MD Alexandre Dangis said: “Delivery problems have become increasingly widespread, affecting raw materials such as polypropylene, polyvinyl chloride, and polyethylene, as well as special additives that are crucial for the manufacture of compounds and plastic products. The serious market disruptions currently taking place all over Europe are a symptom of the structural imbalance in Europe between the local production of and demand for raw materials and additives. Without restoration of that balance, periodic recurrence of gross disruption of the production chain is highly likely.”
Some 50,000 SMEs that form the plastics converting industry in Europe are furthermore still recovering from the effects of the COVID-19 pandemic. Now faced with a raw material scarcity that increases production costs, and under threat of closure, surveys amongst plastics converters have shown that more than 90 per cent are affected by this crisis, with many forced to reduce production and accept fewer new customers in order to honour existing agreements. If this situation continues, the supply of essential goods for the food and pharmaceutical industries will no longer be guaranteed, an EuPC press statement read
Ron Marsh, Chairman of the Polymers for Europe Alliance, added: “The demand for certain raw materials used for protective articles against COVID-19 is extremely high. In addition, we see an unprecedented great number of declarations of force majeure.”
In many cases, a switch to recycled material is feasible, but only to a limited extent. In several applications, legal safety regulations, technical hurdles, and quality requirements currently prevent the wider use of recycled materials. Furthermore, recyclates are not available in sufficient quantities and consistent quality. Where recyclates are established alternatives, prices are rising significantly to parallel virgin material.