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GKV: supply bottlenecks and mark-ups put converters under massive economic pressure

01 Apr 2021 − 

The federation for Germany's plastics converting industry (GKV) expressed concern over the current raw materials crisis: lacking plastics supplies were reportedly already affecting production and the delivery capacity of plastics converters.

Especially medium-sized companies were burdened by the current situation. On the one hand, the current price development presented economic challenges for converters, on the other hand, "there is simply a lack of volumes" that "are necessary due to rising demand," GKV stated on 18 March. This was dampening the industry's recovery.

From standard commodity plastics to engineering plastics, there was a shortage of all types. In the course of this, prices across Europe had also risen sharply in the first quarter of 2021. For example, according to the GKV, the price of LDPE, an important raw material for packaging, had soared by more than 35% by mid-March, while polystyrene (PS) saw mark-ups of up to 30% in March alone. In the PVC segment, prices reportedly climbed by as much as 61% in the past ten months.

Another problem for converters was that plastic were only partially substitutable. In many cases, switching to recycled materials could only be implemented to a limited extent.

⇒ This is an excerpt from a more comprehensive article to be published in the next edition of EUWID Packaging Markets.

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