Demand for flexible packaging materials is stabilising in 2024. Flexible Packaging Europe published figures for the fourth quarter of 2023 and came to mixed results for the prices of flexible packaging materials.
While the Prices for HDPE rose by 7 per cent compared to the previous quarter and for LDPE by 8 per cent in the same period, the other results were more mixed. The ongoing weakness in demand and the now volatile situation in the Middle East as well as the uncertainties surrounding the war in Ukraine have had a negative impact on the outlook for 2024. The price of 7-micron aluminium foil fell slightly (4%). Elsewhere, one-side coated 60 g/m2 paper fell by 7 per cent compared to Q3 figures, while both BOPP 20-micron film and 12-micron PET film remained unchanged. A modest increase of 1 per cent for 15-micron BOPA film rounded off the year-end figures.
While prices continue to fall or stabilise, most are still well above the target price from the fourth quarter of 2020. 60 g/m2 single-sided coated paper, 15 micron BOPA film, 12 micron PET film, HDPE and LDPE generally remain between 30 and 40 percent above this benchmark and aluminium foil remains 60 percent higher. Only 20-micron BOPP films are returning to the 2020 level and are 13 per cent above this price. However, all of these prices are well below the highs of mid-2022.
„The prices paid in Europe for flexible packaging materials were mixed in the fourth quarter. They fell for both aluminium foil and one-side coated paper. The fall in prices for aluminium foil was mainly due to lower conversion costs. Paper prices tended to remain stable for small and medium-sized customers, while some large buyers agreed to price reductions. Prices for BOPET and BOPP remained stable on average. As demand stagnated, some attempts by suppliers to increase prices were rejected. BOPA prices rose slightly in the fourth quarter, mainly due to price increases for PA6 resin. Consumer demand is expected to remain subdued in the first quarter of 2024. The rebalancing of inventories is largely complete. The situation in the Red Sea is putting pressure on imported raw materials, which could well drive up prices.“
Santiago Castro, Senior Research Analyst, Films and Flexible Packaging at Wood Mackenzie
Guido Aufdenkamp, Managing Director of FPE, added his views on the latest figures: „The combination of very high inventory levels along the supply chain and pressure on end consumer demand due to high inflation has not been favourable for flexible packaging manufacturers, causing a decline in shipments in 2023. ongoing uncertainty due to the various conflicts in and around Europe and around the world, but a recovery in the European economy, a decline in inflation in most regions and a stabilisation in retail sales should have a positive impact overall. The industry is cautiously optimistic for 2024 when comparing demand for flexible packaging with the previous year.“
Source: Flexible Packaging Europe
