News Flash: - Film Price Increases & Availability??
Over the last two years the price of Brent Crude, the benchmark for international oil prices, has fluctuated from a low of $44.70 in July 2017, to a high of $86.07 in October 2018. Right now, it is around $70 and has been at this level since March.
In these circumstances with nearly a 100% spread, it is difficult to understand why polymer prices are rising along with consequent film price increases of between 4 and 7%, dependent on film grade and supplier. Equally concerning are the extended lead times for several specialist films, from 4 to 5 weeks, to 6 to 8 weeks.
We are also notified by two Turkish film manufacturers that they are not taking any further orders in May. The reasons given for these problems will be familiar to anyone who was reading these notes in previous years. In the past, the polymer suppliers were notorious for declaring ‘force majeure and outages’ for maintenance, whenever sales volumes reduced. They did this quite openly to ‘maintain margins’.
In 2016 a group of European Trade Associations brought this to the attention of the EU Trade Commissioner and the problem mysteriously disappeared. However, so far this year there have been plant ‘outages’ at Ineos Grangemouth and at Exxon Mossmorran, force majeure at Borealis Austria and Belgium, production problems at Braskem’s German site, with planned maintenance at Shell Moerdijk, Netherlands.
All these problems coming together could of course be coincidence but whatever the reasons they are stretching delivery times towards the planned August shutdowns in Europe, which could cause further supply problems.
Whatever the reasons, now is not a good time to be low on film stock, particularly laminates and special films either plain or printed. Even if prices don’t increase further (and that is not a given), any further polymer problems will exacerbate an already deteriorating supply situation.
We therefore recommend all our National Flexible customers should place forward orders for film through to the final ¼ of the year. There is no charge for this stock service and with up to 6 months free credit, no risk. But experience tells us if these ‘outages’ continue film prices will increase, along with lead times. Trusting this information is of interest.
As ever if you have any further information on the points raised, your contribution would be welcome. Meanwhile, why not join me on LinkedIn. https://www.linkedin.com/in/barry-twigg-3a440b53/