Raw materials shortages in the European market
The prices for various raw materials, such as plastic, cardboard, steel, tin, textile, leather and wood are increasing substantially. Raw materials are hard to acquire, which has consequences.
The shortages in the European market have various causes:
- The worldwide economic growth, in combination with exports of plastic from Europe to Asia and North America, are leading to scarcity.
- What’s more, the demand for plastic, cardboard, steel and tin has risen enormously due to the coronavirus crisis. People are buying en masse more disinfectant agents in bottles, plastic or cardboard disposables, personal protection equipment and related safety articles.
- On top of this, capacity in these times of coronavirus had been reduced and not restarted quickly enough.
- There is also the matter of a lower production volume of plastic in the United States and Europe.
- Europe is a net importer but has exported at a lower production capacity.
- Global trade is being squeezed due to the enormous unavailability of sea containers. 60% of freight transport occurs by sea. There is not so much a shortage of containers in the world, but rather the problem is that they are in the wrong place. Due to the Chinese lockdown at the start of the coronavirus crisis no one took it upon themselves to return empty containers to China; this was far too expensive. Now that the trading market in Asia is open once more and there are no containers available, the price for just a single sea container has become many times higher over this last year. The shipping costs have increased by more than 500%.
Many raw materials suppliers are currently sending ‘force majeure’ declarations, stating that an order cannot be delivered due to circumstances out of their control. And we can also see the results of the shortages in the price. The cost price of packaging materials and other products that are made from plastic, cardboard, steel, tin, textile, leather or wood depends largely on the raw materials of the product. And this problem is not limited to just the Netherlands; all of Europe is suffering from the enormous shortage of raw materials. The graph does however show that the price increase for plastic is levelling off.
We are keeping a close eye on the developments, and we will also keep you informed in the coming period about price changes and delivery times. We will do our best to deliver to our customers and to think about other possibilities. The use of recycled plastic is a sustainable alternative for using products from virgin materials. Here, too, we will happily examine the possibilities with you:
Please feel free to contact and ask us about the possibilities!