Materials

New Polymers for Europe Alliance addresses supply shortage

Trade association European Plastics Converters (EuPC) has established a new group, the Polymers for Europe Alliance, to combat the ongoing issue of polymer production reliability.

New Polymers for Europe Alliance addresses supply shortage

Over 40 force majeure situations (shutting down of production due to uncontrollable circumstances) have been declared in the past four months, leading to a sudden material shortage of polymer resin that has reportedly forced plastics converters across Europe to shut down production lines. According to EuPC, some sites have experienced more than 11 force majeure claims in two years.

Because of this lack of production from some of the largest suppliers of polymers in the EU, prices have risen to a decade-high level, despite the relatively low price of oil (earlier this year, the price of oil fell to under US$60 (£40) a barrel for the first time in five years).

EuPC President Michael Kundel has expressed concern at the state of the polymer supply chain, stating: “It seems that after months of low oil prices the petrochemical industry appears to be clawing back margins in the polymer value chain by stopping some crackers in Europe one after the other.

“This situation is very serious, risking future customers for raw material producers and raising several antitrust concerns. 

“Due to the increased pressure of several trade associations, users, original equipment manufacturers (OEMs) and brand owners, the EU authorities are starting to look deeper into these force majeure situations.”

Polymers for Europe Alliance work

Accordingly, EuPC decided at its recent General Assembly in Warsaw to set up the Polymers for Europe Alliance, comprised of companies and associations from across Europe (not limited to the plastics converting industry), to provide detailed information on the current polymer market and assist raw material users through its network of national plastics associations.

The alliance will also help companies request suspension of certain EU import duties to relieve the current shortages on polymer markets. It has argued that some companies now face bankruptcy due to their lack of sufficient stock volumes, as a consequence of the low demand for products in 2014.

It has also announced that it will carry out a study on the ageing of polymer sites in Europe to provide more transparency on the future development of polymer production sites in Europe, and conduct a search for more reliable supplies of polymers that can be imported.

Packaging Federation Chair to front alliance

Ron Marsh, Chairman of the Packaging Federation and Non-Executive Director of British Polythene Industries PLC, will lead the alliance, reporting to the EuPC Steering Committee.

He said: “All plastics converters in Europe will now have the possibility to rate their polymer suppliers on specific customers’ criteria and some basic commercial and ethical rules will hopefully be reinstated.

“The best polymer supplier for Europe will be announced next year in 2016 during the EuPC Annual Meeting in Lyon, France. Hopefully the situation will have improved by then.”

EuPC Managing Director, Alexandre Dangis, added that he hoped suppliers will be able to maintain a credible European industry: "We hope that polymer producers in Europe will reinvest current margins in the ageing European production sites in order to maintain a credible European polymer base to serve the plastics converters in a sustainable manner.

“Europe drives innovation in plastics packaging and thinking in waste management. Investment here safeguards global markets."

Find out more about the Polymers for Europe Alliance.

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