Essential goods production threatened in Europe amid raw materials shortage

Brussels – The European polymer converting industry is facing “severe shortages of raw materials and extreme price increases never experienced,” according to the latest report by trade association EuPC. 

In addition to survival pressure on ‘numerous SMEs’, the situation is threatening the production of “countless products” from building and automotive components to essential goods for the food packaging and pharmaceutical supply chains, said EuPC in a 13 April report.

“Manufacturers of plastic products all over Europe are experiencing serious bottlenecks in the supply of raw materials since the beginning of this year,” noted EuPC managing director Alexandre Dangis. 

Delivery problems have become increasingly widespread, affecting raw materials such as polypropylene, polyvinyl chloride, and Polyethylene, as well as special additives that are crucial for the manufacture of compounds and plastic products, he added. 

According to the official, the serious market disruptions are currently taking place “all over Europe”, and highlight a structural imbalance in Europe between the local production of and demand for raw materials and additives. 

“Without restoration of that balance, periodic recurrence of gross disruption of the production chain is highly likely," he added.

Europe is a net importer for polymer raw materials and is therefore “above-average vulnerable” to market disruptions, explained Ron Marsh, chairman of the Polymers for Europe Alliance. 

According to Marsh, the current shortages are caused by a number of developments including the improving global economy, lower production of plastics in the US, demand for Covid protective articles and “an unprecedented great number of declarations of force majeure.” 

Citing recent surveys of more than 50,000 SMEs across several EU states, EuPC said that more than 90% of the small businesses have been affected by the supply crisis and “many are forced to reduce their production.”

“If this situation continues further, the supply of essential goods for the food and pharmaceutical industries will no longer be guaranteed,” the association added.