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Report: Price change of packaging commodities

13/10/2021 - François-Xavier Branthôme - 2021 Season
Between August 2020 and August 2021, prices for packaging materials – especially steel - increased by up to 185% in Europe and 225% in the US. Mintec summarizes the details of this price hikes.

The Mintec Category Index for packaging (global) maintained an upward trajectory in August, rising by 2.1% m-o-m to USD 1,789/MT. This represents an increase of 68% compared to the same period the previous year and 35% since the beginning of the year. The index was primarily driven by a rise in plastic and metal prices, as demand continues to surpass supply for packaging materials.


Prices for packaging products have registered strong increases over the past eighteen months. The Mintec report presents a summary of the situation last August and the monthly and annual evolutions of the main materials used: hot rolled coil (HRC) steel, High- and Low-density polyethylene (HDPE and LDPE), polyethylene terephthalate (PET) and Polypropylene (PP).

Steel HRC
According to the September 2021 Price Inflation Report recently released by Mintec, US steel hot rolled coil (HRC) price decreased slightly in August from July highs, down by 1.3% m-o-m but up by 222.5% y-o-y to a monthly average price of USD 1,888/mT. The m-o-m decline is due to a slight improvement in domestic steel production, coupled with a slowdown in demand. Upcoming steel mill maintenance outages will support domestic HRC prices over the contract negotiation period, regardless of the weaker demand from the end use sector.
Due to August's low demand and trading activity, Northern Europe steel HRC also decreased slightly by 0.7% m-o-m and increased by 185.8% y-o-y to EUR 1,204/mT.

EU HDPE prices have been driven higher by tight supply and firm global demand. However, some factories have begun to reopen and lift forces majeures. This caused the August average price of EU HDPE to drop marginally to EUR 1,848/mT, up 65% y-o-y and it was down 2.3% m-o-m.
The EU LDPE price exhibited the same trend as the EU HDPE price, falling slightly on the back of easing supply. Consequently, the August average price of EU LDPE was EUR 2,271/mT, up 87% y-o-y but down 1.8% m-o-m.

US polymer prices were pushed higher by factory closures in Q3 2020 and Q2 2021 amid firm global demand. This significantly depleted US HDPE available stocks, having caused prices to surge since the beginning of 2021. Suppliers are now holding back supply from the market, in favor of replenishing their inventories. The August average price of US HDPE was recorded at USD 2,657/mT up 94% y-o-y and 3.9% m-o-m.
US LDPE mirrored the market trend in the US HDPE market, supported by reduced production and strong global demand during August. Accordingly, the August average price of US LDPE reached USD 3,208/mT up 77% y-o-y and 3.2% m-o-m.

The EU PET market weakened slightly as PET factories began to reopen, alleviating some of the supply issues the EU PET market has dealt with over the past half year. The price remains significantly higher y-o-y however, supported by market tightness. The August 2021 average price of EU PET was recorded at EUR 1,204/mT up 54% y-o-y but down 0.8% m-o-m.
The EU PP price followed the EU PET market, falling slightly on gradually improving supply, though supply still remains tight y-o-y and demand remains firm. Like other plastic materials, the EU PP market has been driven more by fundamentals, rather than by COVID 19. The August 2021 average price of EU PP was EUR 1,853/mT up 69% y-o-y but down 0.9% m-o-m.

The US PET market was significantly impacted by substantial plant outages in Q3 2020 caused by hurricanes, followed by severe winter storms during February 2021. These hit primary petrochemical plants on the Gulf Coast and caused essential plants to declare force majeure. Although plants have begun to reopen, supply remains insufficient to meet demand. The August 2021 average price of US PET was USD 1,774/mT up 64% y-o-y and 2.57% m-o-m.
The US PP market was severely impacted by the plant outages in Q3 2020 and February 2021. The tight supply has been insufficient to meet firm US demand, leading to increased reliance on PP imports from Asia. Factories have gradually begun to reopen, after the closures caused prices to slip in April but these continued to recover in August, with many US suppliers holding back supplies to replenish inventories. The August average price of US PP was USD 3,808/mT up 154% y-o-y and 10% m-o-m.

The GD2 price stayed flat at EUR 1,065/mT in August, up 16.4% y-o-y driven by brisk demand and high prices for recovered paper. The EU GC2 price stayed stable in August compared to July. The monthly average was 4.6% higher y-o-y, at EUR 1,465/mT. Due to rising pulp and wood costs, producers are calling for further mark ups for deliveries from September or October.

Some complementary data:
- Coated chromo duplex board (German abbreviation: GD2): Cardboard with a high recycled paper content. The uppermost layer below the coating is wood-free white. The intermediate and lower layers are grey.
- Coated chromo board (German abbreviation: GC2): High-quality virgin fiber board with a smooth white upper surface, high volume and good rigidity. The intermediate and rear layers are light in color.

Energy, transport and packaging: many aspects of recent cost increases were studied in detail and presented by experts of the tomato processing industry during the Online Conference organized by Tomato News on June 8th. The slides and videos are available here.

Source: Mintec
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