NetComposites
3M

Massive Price Escalations Forecast

18 November 2005

The German composites industry association, AVK, is forecasting that the GRP sector will see massive price escalations by the end of the year, with unsaturated polyester resins and polypropylene equally affected.

According to them, the continuing upsurge in prices for mineral oil-based raw materials targeted for GRP manufacture, which has been going on for the past few months, has accelerated once more in October. Thus, raw material prices in the mix showed a 10 – 20 % increase within a single month. This is partially due to the increase in glycol, maleic anhydride, and styrene prices. They have seen similar tendencies with respect to PP, which serves as a matrix material for GMT and LFT.

This forecast massive price uptrend results not only from increased oil prices, but also from the highly variable availability of processing capacities. The temporary shutdown of intensely utilized refinery capacities has an immediate effect on the pricing. At the moment this is particularly true of ethylene-based raw materials.

Owing to the prevailing quotations, consumers are currently purchasing only minimum volumes of raw materials that are absolutely indispensable for production, making it impossible to entirely level out highly volatile raw material prices in the next refining process chain.

Several AVK member companies are convinced that Europe is to expect massive price increases for GRP and GMT/LFT by the end of the year. Current prognoses are predicting a two-digit percentage range. Considering the uncertain situation just now, Dr. Uwe Bültjer, Managing Director of the AVK, considers it inadvisable for moulders to enter upon long-term fixed-price obligations with their customers.