Wow – raw material inflation moves to the next level with pricing on dispatch!

PP film prices are now not fixed between ordering and dispatch!

PP film prices are now not fixed between ordering and dispatch!

Today I’ve had this communicated to us from an industry supplier about plastic film pricing.

“…there have been two ‘game changing’ developments in film supply……

1. We have 2 major film manufacturers who will not accept ‘price as ordered’. They maintain that polymer is moving too quickly and therefore price must be agreed on dispatch.

2. Film price increases are being faxed through on dates ‘prior to delivery’ i.e. the film is on 5-6 weeks lead time and the price is increased whilst awaiting delivery.

These proposals are each on a take-it-or-leave-it basis. Not since 1988 have we seen this attitude from film suppliers and it indicates how desperate they are to avoid having to absorb polymer price increases and the speed at which the prices are changing. Meanwhile the inexorable increase in film prices continues with both March and April seeing higher polymer costs. Not surprisingly BASF, a key European polymer supplier has just announced record profits, whilst two acquisitions by Gulf-based manufacturers of European companies highlights the future shape of the film supply industry.

This is the most powerful example I’ve seen of raw material price inflation in our industry , and its only getting worse.  Gone are the days of 5% a year – we are now moving to multiple 10%+ prices rises a year due to global demand.

Please forgive us if we have to adjust prices in the coming months !