Packaging Market Update – March 2022

Packaging
Packaging Market Update – March 2022

As we approach the end of Q1 2022, we want to take the opportunity to provide an update as to how we see the current packaging market. Like our previous January edition, this market update is designed to provide a brief overview of some of the current influences on materials and key product lines.

Paper

Packaging Market Update – Paper/Pulp
  • 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.
  • No further price increases for Q1 2022 have taken place.

Click here to view our range of corrugated packaging products.

Polymer

Packaging Market Update – Polymer
  • Raw material costs continued to increase in October (+£30/tonne) and November 2021 (+£95/tonne).
  • As Q1 2022 closes, the situation is exacerbated by spiralling energy and re-granulated plastic costs.
  • The ongoing conflict in the Ukraine has led to a large surge in price of raw materials, with the potential for further significant price increases.
  • While prices remain high, there is a risk that recycled materials will soon exceed the cost of virgin, assuming there is sufficient supply to meet demand.
  • A lot of this is being driven by the upcoming UK Plastic Tax which comes in to affect in April 2022.
  • We are now in a new post COVID-19 phase, characterised by high carriage costs and limited capacity issues.
  • On average, polymer-based products have witnessed an 80% price increase.

Click here to view our range of polymer packaging products.

Steel

Packaging Market Update – Steel
  • Steel prices continue to remain at an elevated level as we move towards end of Q1 2022.
  • Prices have levelled & in some cases reduced slightly, however the trend remains upwards and overall prices are still significantly higher when compared to 2020 averages – up 33%.
  • Some recent reductions will be monitored as we progress in 2022.
  • Post COVID-19, there are still some disruptions being experienced at certain points in supply chain.
  • The ongoing conflict in the Ukraine has led to a large surge in price of raw materials, with the potential for further significant price increases.

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 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:

sales@hub-packaging.com

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