How will raw material shortages impact British manufacturing?
The British Plastics Federation has warned the whole plastics supply chain that plastics processors are currently facing shortages of key materials.
Polymer shortage in Europe ‘impacting production’
The warning aired by the British Plastics federation (BPF) – the UK trade association for the Plastics Industry – is based upon intelligence from member businesses about the severe shortages of plastics raw materials in the industry. The BPF represent the whole supply chain including polymer producers, distributors, additives suppliers, machinery manufacturers, processors and recyclers.
A spate of force-majeure declarations
While demand for polymers grew in the second half of 2020, supply did not follow accordingly. Issues as wide ranging as a global shortage of shipping containers to extreme weather conditions in the USA leading to production losses affecting the European market have all contributed to the alarmingly low stocks. This spate of force-majeure declarations meant companies are experiencing price increases.
‘There has been a spate of force-majeure declarations reminiscent of 2010. It certainly appears that some processors, of particularly LDPE, LLDPE and HDPE, are on allocation. This threatens their ability to fulfil contracts. It is important for their customers to recognise that they have genuine difficulties. This is not just a UK issue it certainly affects France, Germany and Italy. Plastics materials, were essential components of crucial food supply, mobility, healthcare and defence applications. The prevalence of just in time delivery systems means rapid disruption to a supply chain if a plastics processor cannot deliver. Plastics materials are a prized national resource which should be nurtured and fostered.’
Philip Law BPF Director-General
Force majeure is a common clause in contracts which essentially frees both parties from liability or obligation when an extraordinary event or circumstance beyond the control of the parties, such as a war, strike, riot, crime, epidemic, sudden legal changes, or an event described by the legal term act of God, prevents one or both parties from fulfilling their obligations under the contract.