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European plastics industry suffers "destructive blow": raw material supply is interrupted,

source:[Gravimetric blender]   release time:2021-03-06 14:23:35

Due to the shortage of supplies in the United States, the price of polymer resins used in the manufacture of plastics in Europe has risen to a six-year high, which has caused European plastic product manufacturers to face a serious crisis.

ICIS data shows that since December last year, the price of polyethylene and polypropylene, the most commonly used plastic resins in the European market, has risen by more than 25% to 1,500 euros per ton, the highest level since 2015.

This has a major impact on European plastic product manufacturers. If prices continue to rise, the additional costs faced by manufacturers may be passed on to supermarkets, other retailers and consumers.

Ron Marsh, director of the Polymers for Europe Alliance, an industry organization, said that the current market is facing severe shortages. Due to the low supply, market liquidity has dried up and related industries are facing "destructive effects."

The shortage of polyethylene raw material supply in Europe is mainly caused by the supply interruption in the United States.

ICIS analyst Will Beacham said that the long-term interruption of power and raw materials caused by freezing and icy weather has severely hit the normal production of chemical plants and refineries in the Gulf Coast region, resulting in a shortage of supply in the industry.

Blizzard in Texas, the United States, has currently caused the closure of 90% of polypropylene production capacity and 67% of ethylene production capacity in the United States, and has destroyed other important chemical products.

In terms of output, ethylene is the most affected, with an offline capacity of 26 million tons, accounting for 67% of the total in the United States. And about 11 million tons (50%) of propylene production capacity is also in a state of suspension.

In terms of percentages, the most severely affected commodities are epichlorohydrin (100% suspension of U.S. production capacity), propylene oxide (100%), toluene diisocyanate (100%), ethylene glycol (90%), and polypropylene. (90%), propylene glycol (88%), acrylonitrile (73%) and styrene butadiene rubber (71%).

This makes the European market, which is heavily dependent on US imports, facing severe supply shortages.

It is not clear when the related supply shortage will be alleviated. Ron Marsh, director of the Polymers for Europe Alliance, warned that if the tight supply continues for another month, “the food packaging products in the supermarket may run out.”[Gravimetric blender]