Film Prices:- Panic Buying Exacerbates Film Shortages! And “Enigma”

Posted on 28 Mar 2017

Film Prices:- Panic Buying Exacerbates Film Shortages! And “Enigma”

“It’s Déjà Vu All Over Again” (Vince Lombardi)

The present supply situation for most polymer based films looks very much like a re-run of the 2015 situation.  Now, as then, polymer supply became “tight” in the first six months of the year due to polymer plant “outages”, both planned and “Force Majeure”.

Any regular reader of these jottings knows that the systematic limiting of supply by the major polymer manufacturers is a regular feature in the first ¼ of the year when demand picks up after the December break.

This year is no exception, but unlike 2015, polymer prices in China and The Far East are at European levels so importing film from this region (which has happened in the past) is not an option.

The signs in the market of continental problems are as follows:-

1. There have been price increases for virtually all grades of film Jan/Feb & these are being added to week by week in March. So far in 2017 we have had 15% + price increased on all grades.
2. Lead times, even for commodity films, have been growing. At best, film on 4/5 week lead time has gone to 6/8, but some special films are now 10 weeks +.
3. A recent order from ourselves to a regular supplier was reduced by 80% from 100 tonnes to 20 tonnes.
4. Another supplier of commodity film is quoting 8 weeks lead time – price to be agreed ON DELIVERY.
5. Two film manufacturers we interviewed last week, one from Turkey and one from Europe – both felt the situation would get worse, before it gets better.
6. Financial results from the final ¼ of 2016 suggest that profit margins have suffered on many grades of polymer. The recent fall in the oil price suggests polymer manufacturers are limiting supply in order to recover margins.
7. Other converters have been in contact with us trying to purchase film.

In 2015 the Flexible Packaging Business Associations from the UK, France and Germany raised the anomaly of falling oil prices yet ever increasing Polymer prices with the relevant EU Trade Commissioner. Surely it’s time to take this step again.

There is a worldwide “glut” of oil despite the best efforts of O.P.E.C. and the Russians.  In these circumstances these trade associations need to apply as much pressure as possible on the National and International legislative bodies.

One final thought:-  As the merger mania we have seen across Europe consolidates the buying power of companies such as R.P.C., Mondi, TI, Amcor etc. etc. are these giant companies getting better deals?  If not why are they not “creating waves” instead of just passing price increases onto their customers?

Well done all those Natflex Customers’ who bought forward in January, as price increases in April are unavoidable.

Enigma & The Exhibition

Many thanks to all those customers and others who visited the stand.  It was good to make the acquaintance of so many people who read these notes.  I am obviously pleased they are of some interest and most of those I spoke to recognised that the “Enigma” prints are special, as a consequence, we now have many more on order.

Plastic Demonization

Finally, I am currently in the deep south of the USA – but before I left:-

• The “Problems with Plastic” were front page news in the times in February.
• Similarly, there were two full pages inside the Daily Telegraph later in the month.
• The demand for “Plastic Free Aisles” in Supermarkets was featured, not only in the press, but on the BBC peak time news bulletins.

When are we, as an industry, and I include the supermarkets and major food manufacturers/packers going to wake up to the threat to our business which is growing month after month.  Anyone who understands our industry appreciates we prevent tens of thousands of food waste occurring every year.  In addition, we are one of the most creative industries in the UK at developing new ways to reduce the use of our products by making them better year after year.

Unfortunately, I have not the time available right now elaborate on these problems, but I hope to take the steps on my return to ensure we do our bit as a business to raise awareness to get our message across, first to the food manufacturers and then the politicians.

As ever any thoughts you may have on any of the items raised would be most welcome.

Meanwhile why not join me on LinkedIn?