Material cost increases are impacting producers, says trade association IK

German packaging association Industrieverband Kunststoffverpackungen (IK) says the existence of its members is at risk if they cannot pass on large cost increases in raw materials to their customers.

According to IK, its members have been affected since the beginning of the year with polystyrene rising in price by 60% and low density polyethylene by 40% and the association says there is no sign of this trend stabilising or reversing.

The blame is placed on strong demand in the USA, China and other countries in the Far East, as well as bottlenecks at refineries in monomer production and to a lesser extent the high oil price. Polystyrene and polyamide have also been affected by the benzene price more than doubling so far this year, a factor that is also concerning GRP producers.

IK points out that January’s expected introduction of a toll for lorries on German motorways will add to cost pressures. Transport costs account for an average 10% of plastics packaging production costs and transport companies are seeking 15% to 20% increases in their charges.