C2 Background
Last quarter of 2022 sees only slight relief in prices for flexible packaging materials
Only 60gsm one-sided coated paper bucked the downward trend, as it did in Q3, as the price increased 10% from October to December, ending 2022 42% higher than the previous year. The only material to register a double digit decline was 20 micron BOPP film, down 15% on the preceding quarter. HDPE and LDPE fell 7 and 6 percent respectively, ending the year broadly the same as the end of 2021. Aluminium foil (7 micron) fell marginally by 3%, but still 21% ahead of December the year before. While both 12-micron PET (down 4%) and 15 micron BOPA (down 3%) films hover around 20% above their 2021 levels.
High levels of uncertainty
Assessing the latest figures David Buckby, senior analyst at Wood Mackenzie said, “Sluggish demand and high levels of uncertainty pushed most substrate costs down in Q4. Each stage of the value chain sought to run down their inventories, but this process is being lengthened by weak consumer demand. Several material suppliers and converters noted Q4 volumes being down by double-digits year-on-year.”“Lower raw materials prices also supported substrate price reductions, as did excess global capacity in markets like BOPET film. Energy costs were a mixed bag. While some film suppliers absorbed hikes in Q4 others noted that prices had come down from the peaks seen in the summer but are still on an extremely high level. Lower container costs also supported reductions for offshore materials,” he added. “Flexible packaging papers were the exception, as prices increased in the quarter due to higher energy costs and previous increases in pulp costs having an impact.”
