Raw material prices show new surge
1st November 2021
September showed a new surge in raw material prices affecting the paint and printing inks sector with manufacturers now coming under further huge cost pressures.
With raw materials accounting for about 50% of all costs in the industry and with other costs such as energy also increasing rapidly the impact on the sector cannot be overstated.
Oil prices have now more than doubled in the last 12 months and are up by a staggering three-and-a-half times on the pre-pandemic low point of March 2020 more than matching the huge increases seen during the OPEC led oil price crisis of 1973/ 1974 and more recently the sharp price rises reported in 2007 and 2008 as the world economy headed into recession. At $83 per barrel, oil prices today are now up from an average of $42 in September a year ago.
The impact on paint and printing ink producers is obviously very severe with solvent prices now 82% higher on average than a year ago and with resins & related materials seeing a price hike of 36%. For some important solvents used by BCF member firms’ prices are up by 2 or 3 times with notable examples being N-Butanol up from £750 per tonne to £2,560 in a year. Other big increases of 2 or 3 times were seen for N-Butyl Acetate, Methoxy Propanol and Methoxy Propyl Acetate.
Higher prices were also seen for resins and related materials with, for example, the average price for Solution Epoxy Resin up 124% in September on this time last year.
Elsewhere, many pigment prices were also sharply higher with widely used Titanium Dioxide prices 9% higher than a year ago. In packaging, prices were higher across the board with, for example, 5 litre round tins up 10% and with drum prices 40% higher in the last month.
Reliable forecasts are hard to come by but with most major forecasting bodies expecting oil prices to remain north of $70 per barrel for 2022 the indications are that higher costs are here to stay.
If you have any questions about these BCF statistics please contact Whittle Industry Data,
tel: 01206 824028, email: firstname.lastname@example.org