As we ease our way into January 2022, what’s becoming increasingly clear is the packaging sector is still typified by the upwards pressure on the cost of raw materials, availability of containers & shipping and labour shortages driven in part by COVID-19 and the current surge in cases from the Omicron variant.
This market update is designed to provide a brief overview of some of the current influences on materials and key product lines.
Paper
- Instability of raw material supply continues to cause challenges for the market.
- Strong demand has excaerbated these issues, with Q4 2021 being extremely challenging.
- A shortage of white & kraft paper driven by the ‘downtime’ in European mills particularly.
- Price of wooden pallets, substantial haulage issues (driver & vehicle availability) & cost of energy and raw materials continue to drive up prices for corrugated packaging.
- COVID-19 is still causing major issues both in terms of availability of raw materials and staff.
- Q4 2021 witnessed large price increases, with consecutive increases experienced in October & November.
- Prices from suppliers have seen a 45% increase from February 20202 to end of 2021.
- A 6.5% forecasted further increase for Q1 2022 has not materialised. We expect this will remain the situation for rest of January without any further prices changes. The expectation now is that the price increase will flow through in February 2022.
Click here to view our range of corrugated packaging products.
Polymer
- Having steadied in August & September, raw material costs have increased again in October (+£30/tonne) and November (+£95/tonne). Spiralling energy and re-granulated plastic costs are an added pressure.
- Virgin material has seen an increase of 3.5 – 4.8%, impacting certain polymer-based products.
- Critically, recycled material is also in short supply as many manufacturers convert their conventional product range to 30% recycled content. This is in advance of the UK Plastic Tax which comes in to affect in April 2022.
- Again, COVID-19 is impacting both supply and labour availability.
Click here to view our range of polymer packaging products.
Steel
- Steel prices continue to remain at an elevated level as we move into 2022.
- Prices have levelled & in some cases reduced slightly, however the trend remains upwards and overall prices are still significantly higher than 2020.
- Some reductions have been seen in recent weeks & will continue to be monitored as we progress in 2022.
- Like polymer and paper, COVID-19 is impacting both supply and labour availability in the steel industry.
Click here to view our range of steel packaging products.
Tapes
- Price of Butyl Acrylate has risen from $800MT to $2,800MT – an increase of 350%. In normal trading periods this would generally fluctuate up to a maximum 10% either side of the commodity price level.
- Increase in price of BOPP Film by almost 30% since 8th October 2021.
- Shortages of containers, due to stockpiling worldwide is creating additional problems.
- Vinyl tapes continue to increase in prices every month, businesses are looking at alternative tape types to try and offset the rising trend.
- For Indian manufacturing, a steep increase in price of coal (which is used as the primary form of energy to dry the adhesive) by almost 300%. As it currently stands, the mining of coal in India is coming to a standstill. Around 80% of India’s industry runs on coal.
Click here to view our range of packaging tapes.
Hub is here to help
Hub Packaging hope we can help you navigate these uncertain times. Get in touch today and one of our technical experts would be happy to identify how we can help you manage and reduce your packaging spend.
Contact us today using any of the below methods to speak with one of our technical team. Alternatively, if you have any queries regarding products that may be impacted by the above, please contact your Account Manager who will provide more information.
Phone:
+44 (0) 28 4175 4977 (NI)
+353 (1) 866 0136 (ROI)
Email:
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