BASF announces second packaging price hike
Yesterday the company announced the second increase in as many months for its Styrolux polymer - commonly used in a variety of cosmetics packaging.
BASF said it had increased the price of the material by €150 a tonne and attributed the new increase to the fact that raw materials, energy and transport costs had risen still further in the period since.
Second significant polymer price hike
These increases are on top of those announced at the end of June, when the company said it was raising the price of Styrolux by €100 a tonne.
On top of this the company announced in mid-June that it was increasing it price of paper and card board by up to 20 per cent on rising energy and transport costs.
"We are working on this issue together, but costs for raw materials and energy have risen significantly forcing us to increase prices accordingly," a spokesperson for BASF said of the price increases at the time.
"We are aware that improved efficiency over the whole value chain is an overall challenge to raw material suppliers like BASF and for our customers and their customers," added the spokesperson.
Price hike double whammy!
News that the cost of packaging materials is on the rise is likely to provide a double whammy for cosmetics manufacturers who have been hit by a series of increases for ingredients recently.
Big chemical and raw ingredients suppliers such as Dow, BASF and Sun Chemicals have implemented price increases that exceed the 10 per cent barrier in the past few months, impacting the price of both packaging and raw materials.
However, more recently those price increases are being passed further down the chain to major refined and active ingredients players like Symrise, which makes it likely that other players in this category will follow suit in the near future.
Key to manufacturing costs is the price of oil, which on July 11 peaked at $147 a barrel, more than double its price one year ago.
Oil prices fall, reducing pressure
But on increased supplies and the aversion of a major hurricane in an oil producing region off the Gulf of Mexico, oil prices have dropped in the past couple of weeks, providing a glimmer of hope for manufacturers.
Yesterday the price of US light crude oil - a barometer to global oil prices - closed trading at $127 a barrel, which could point to less pressure on commodity and manufacturing prices in the short-term.
Some experts had estimated that the cost of crude oil could hit $250 a barrel by the end of the year, which could have potentially devastating effects for a range of manufacturers.
But with oil prices now falling the pressure on manufacturers seems to have eased for the time being.
