Rising oil prices affect soft pack industry

The rise in oil prices has made China's small and medium soft pack factories feel that this summer's summer is a bit cold. However, the large and medium-sized soft pack factories actively responded to these measures and adopted measures to reduce production costs and adjust production plans to overcome the impact of rising oil prices.

The large increase in oil prices this year and the longest duration have been unprecedented since the reform and opening up of China in the early 1980s.

The rise in plastic prices caused by rising crude oil prices is quite alarming. Compared with the same period of last year, the prices of organic solvents such as toluene, ethyl acetate, and methyl ethyl ketone in chemical raw materials rose by 50%, 45%, and 55%, respectively. In plastic particles, polyethylene was the representative, and LDPE, LLDPE, and MPE were in the original On the basis of an increase of 70%, 50%, and 30%, plastic films made of plastic particles also rose rapidly. The prices of OPP, CPP, and VMCPP rose by 35%, 25%, and 15%, respectively. It should be said that such a large increase in raw materials involved in such a wide range of raw materials is beyond the expectation of all plastics processing industry.

In the case of flexible packaging manufacturers that currently account for 70% to 80% of their manufacturing costs, only 5-10% of the original profit margin was immediately consumed by raw materials. As far as the current form is concerned, whether or not raw materials can fall back is still unknown. Even if there is a drop in the industry, it is generally believed that it cannot return to the price level in the fourth quarter of last year.

All plastics processing companies, including flexible packaging manufacturers and related companies, are living in dire straits, and profits have become unnecessary, and survival is an urgent task.
There are always two aspects of the development of things. While marveling at the difficulty of the survival of flexible packaging companies, some neglected technologies and management innovations are increasingly highlighting their advantages and getting more and more attention. Low-energy technologies that maximize the use of resources will reduce production costs and enable companies to stay ahead of the competition in the market to survive and grow. Companies that are well-prepared in this area will benefit greatly from their long-term vision.

At present, the plastic flexible packaging industry is in a completely competitive market. The investment scale of various manufacturers is uneven, the distribution is scattered, and the industry coordination ability is poor. In the face of the upstream raw material manufacturers, they are at a disadvantage in the negotiation of procurement of raw materials and are not eligible for bulk purchase. condition. In the case of rising raw materials and fierce competition among industries, the entire industry is in a very unfavorable position in response to pressure from downstream customers to effectively raise prices to increase costs.

Of course, there is also a good side to rising oil prices. The application of water-soluble adhesives has not been emphasized and promoted in the past due to its different characteristics from dry complex ester-soluble PU adhesives. The huge differences in the prices of water and ethyl acetate have forced flexible packaging companies to change their original concepts and instead actively promote the use of the technology. Of course, solvent-free compounding is also the same trend. It can be said that the advantage of cost offsets the obstruction of the inherent concepts, and the new technology has been fully brought to the stage. This can not be said to be a good side to the rise in oil prices.

Source: Flexible Packaging

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