Polypropylene Global Supply Crisis

March 2021

Dear customer

There is currently a severe global shortage of PP (polypropylene) resin and the overall position has significantly worsened in the last few weeks. The main factors contributing to the shortage are:

• Severe winter storms in the USA that reduced oil-refining output by 42%

• Reduced demand for transportation fuels, meaning that the by-products needed for polymers are not being produced.

• Unplanned shutdowns and new capacity coming on stream late

• A big increase in food packaging demand as people stayed at home

• An unprecedented demand for Covid related PPE. Most face-masks are non-woven PP.

This shortage has caused the price of PP resin to spiral almost out of control. As a result, film manufacturers have been forced to increase their prices accordingly. Previous fixed price contracts and quota agreements are now cancelled virtually worldwide. Some suppliers are now only confirming their final price at the time of delivery.

With our raw material prices in some cases more than 75% higher than this time last year, I regret we have no choice but to pass on these increases to our own customers. Depending on the size and thickness of the bag you should expect an increase of 30-40%.

All new bag orders will therefore be re-priced at the time of ordering. But, as we cannot be sure exactly what price our film will be until it has been despatched, any revised bag prices that we provide should be considered provisional.

In some cases, I very much regret that it may be necessary to increase prices on existing orders including those that have already had a previous increase applied. Where this is necessary, we will notify you prior to manufacture, and you will be free to cancel the order if you wish.

PLA prices are at present unaffected.

We greatly appreciate your continued business and support through this time, if you have any questions or concerns regarding the situation please do not hesitate to get in touch and one of our team will be happy to help.

Raymond A Clarke

Managing Director

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