BRITISH COATINGS FEDERATION
Raw material availability and prices hikes may end up as 2021 ’ s biggest issue for the coatings and printing ink sector
Lack of availability of key raw materials and packaging , and significant price increases are causing significant disruption to the coatings and printing ink industries in the UK and across Europe .
There are four significant trends affecting raw material prices :
Strong global market demand has led to shortages on many raw materials
The oil price has risen by 58 % since November ( currently $ 68 a barrel )
The global shortage of shipping containers has led to a sharp rise in transport costs from Asia to Europe thus further restricting supplies to Europe .
Additional non-tariff costs related to the new UK customs arrangements with the EU are adding to the cost of imported raw materials into the UK from Europe .
However , there are also some specific reasons for some of the recent increases .
Solvents are one category where prices are going through the roof . Some examples in BCF ’ s monthly raw material prices survey shows the largest increases in solvent prices in January 2021 versus 12 months ago are acetone ( 123 %) n-butyl acetate ( 91 %), IPA ( 41 %) and n-butanol ( 54 %). A critical issue here are two force majeures at major chemical plants producing butyl acetate .
In January , BCF issued a press release reporting sharp price increases for epoxy resins , of as much as 60 % in Q3 2020 . Similar problems are affecting the market for polyester resins with factory closures in Singapore and Sweden as well an explosion at a factory in China adding to the difficulties . There are also problems with bisphenol-A with stocks being diverted to polycarbonates . Neopentyl glycol and methanol are also both reported to be in short supply .
Concerns have also been raised about pigment shortages , such as red and yellow iron oxide . Plastic polymers are also in short supply , affecting availability and prices of packaging , with 5L paint cans 10 % higher than at the same period last year , and tin plate has had a similar increase .
“ Given that raw materials and freight comprise the majority of the overall Tom Bowtell , CEO cost to produce paints , coatings and printing inks , this trend will have a major impact on the operations of BCF member companies ,” said BCF CEO Tom Bowtell . “ Where possible , BCF members will seek to mitigate higher costs via internal process optimisation measures , alternate sourcing and increased efficiencies ”.
Email : info @ bcf . co . uk Visit : www . coatings . org . uk
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