Pafa, the UK trade association for packaging films, has warned of further raw material increases in the PET market. The association says that strong Asian demand for polyester is starting to add further inflationary pressure to prices in Europe.
Pafa CEO Barry Turner said that the effect of market recovery, as global demand has picked up around the world during the last 12 months, continues to create sharp upward price pressures as suppliers juggle demand and supply for all raw materials.
"The market for thin film polyester has already seen a more than doubling in price this year influenced by strong demand for film applications in other sectors and although PET feedstock prices have risen during the year we are now seeing signs of acceleration in prices of feedstock prices as well," said Turner.
"There is a shortage of PET feedstock in the market for all applications. This has been influenced in part by strong demand for polyester for textiles and clothing, resulting from a shortage of cotton due to the failure of crops in Asia. All of this has had a knock-on effect in the polyester market resulting in significant increases flowing through into Europe at this time which seems likely to result in further price rises in packaging using PET."
Turner said that PET has been winning increasing market share for applications in packaging due to its inherent functional characteristics and recyclability but warns that this success could be hampered. "Apart from its application in bottles, the material has been taking more and more market share in the pots, tubs and trays market and thin film has unique applications in lamination applications," he explained.
"This packaging market is vitally important and stems from the tremendous progress made in securing food shelf-life benefits through improved barrier properties and light-weighting combined with good recyclability."
Pafa revealed that prices for PTA (the principal PET feedstock) recently moved up 26% in one week alone in Asia. "It is difficult to see the situation easing in the short term," continued Turner.
"While demand for this product continues to rise, significant new capacity is currently not forecast to come on stream until 2011/12 - so there is a supply/demand imbalance which is currently driving prices higher. A recent survey of consumers seemed to indicate that the technical benefits and role of packaging was at last being appreciated and it is important that our industry continues to build on this."
Pafa CEO Barry Turner said that the effect of market recovery, as global demand has picked up around the world during the last 12 months, continues to create sharp upward price pressures as suppliers juggle demand and supply for all raw materials.
"The market for thin film polyester has already seen a more than doubling in price this year influenced by strong demand for film applications in other sectors and although PET feedstock prices have risen during the year we are now seeing signs of acceleration in prices of feedstock prices as well," said Turner.
"There is a shortage of PET feedstock in the market for all applications. This has been influenced in part by strong demand for polyester for textiles and clothing, resulting from a shortage of cotton due to the failure of crops in Asia. All of this has had a knock-on effect in the polyester market resulting in significant increases flowing through into Europe at this time which seems likely to result in further price rises in packaging using PET."
Turner said that PET has been winning increasing market share for applications in packaging due to its inherent functional characteristics and recyclability but warns that this success could be hampered. "Apart from its application in bottles, the material has been taking more and more market share in the pots, tubs and trays market and thin film has unique applications in lamination applications," he explained.
"This packaging market is vitally important and stems from the tremendous progress made in securing food shelf-life benefits through improved barrier properties and light-weighting combined with good recyclability."
Pafa revealed that prices for PTA (the principal PET feedstock) recently moved up 26% in one week alone in Asia. "It is difficult to see the situation easing in the short term," continued Turner.
"While demand for this product continues to rise, significant new capacity is currently not forecast to come on stream until 2011/12 - so there is a supply/demand imbalance which is currently driving prices higher. A recent survey of consumers seemed to indicate that the technical benefits and role of packaging was at last being appreciated and it is important that our industry continues to build on this."
