C2 Background
Uncertain supply – manufacturers of plastic packaging lack important raw materials

04.03.2021 Manufacturers of plastic packaging in Germany continue to report worsening supply bottlenecks for various raw materials. A recent flash survey among the members of the IK Industrievereinigung Kunststoffverpackungen (Industry Association Plastics Packaging) paints an increasingly dramatic picture.

Systemically important packaging products in the pharmaceutical sector are also affected by the raw materials crisis.
© Photo: @pexels – pixabay.com
Systemically important packaging products in the pharmaceutical sector are also affected by the raw materials crisis.

Three quarters of the participating companies report a poor to very poor supply situation. This applies in particular to the raw materials PP, HDPE, LDPE and PA. Within 24 hours, 75 companies participated in the survey of their industry association. "Plastic packaging manufacturers are alarmed and in great concern," IK CEO Dr Martin Engelmann summarises the current situation. "The survey results show a clear deterioration in raw material supplies compared to the beginning of the year. And at the moment there is nothing to indicate an end to these supply bottlenecks. In addition, dramatic price jumps are weighing on the industry."

Restricted production

More than 80 percent of plastic packaging manufacturers now say that their production and thus their ability to deliver is already restricted. For the next few weeks, four fifths also expect this development to continue or even worsen. The increasing number of force majeure notifications, mostly declared at very short notice, by raw material suppliers in Germany and Europe are further exacerbating the situation. Eight out of ten packaging manufacturers in Germany are currently affected by one or more force majeure cases. "If the production of packaging comes to a standstill due to a lack of raw materials, this also endangers the system-relevant supply of the population with safely packaged food and medical products," emphasises Dr Engelmann. "We therefore urgently appeal to our partners in the plastics producing industry not to leave the packaging manufacturers in Germany hanging in this crisis and to use all possible levers to defuse the situation as quickly as possible."

Shortages and rising prices

The shortage of raw materials has caught many plastics processors cold: as late as last autumn, the industry had expected a stable supply. At the end of November, beginning of December, the shortage and increase in the price of raw materials had already become apparent. The background to the tense supply situation is an unexpectedly fast recovery and demand in the automotive sector but also in other industries, a simultaneous lack of raw material imports from the USA and Saudi Arabia, which are being redirected mainly to Asia, plant breakdowns in storm-stricken Texas as well as force majeure declarations by raw material suppliers in Europe.

www.kunststoffverpackungen.de
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