Polystyrene price hike to hit packaging sector

Related tags Basf

Chemical giant BASF is set to raise its European price for
polystyrene (PS) by €200 per metric ton from 1 July this year in
response to what it calls totally unsatisfactory margins and

Polystyrene, a standard polymer in BASF's range of styrenic plastics, is used extensively in refrigerator linings and food packaging.

The company is blaming the increases on extraordinarily high raw material costs. The main raw materials for polystyrene are benzene and ethylene, which are used in the production of styrene, the pre-cursor of polystyrene.

"We buy benzene in order make styrene,"​ BASF spokesperson Dr Sabine Phillip told FoodProductionDaily.com. "Benzene prices are affected by oil prices and also of course supply and demand."

As a result of these two pressures, the price of benzene has now reached historically high levels. Prices have been rising steadily since the start of the year, and are now double what they were six months ago.

"Anyone who uses polystyrene for packaging purposes will almost certainly be putting the extra costs through their value chain,"​ said Phillip. "Polystyrene is also used in the lining of fridges and in other features such as coffee machines."

In other words, every manufacturer that uses polystyrene in some part of their production process will be affected.

"It is difficult to predict if prices of benzene have peaked,"​ said Phillip. "I don't think we'll see an immediate improvement, but in the medium-term, we'll be looking to see if things get better."

BASF has also reported that more job losses are likely in Germany as cost-cutting measures fail to offset the negative effects of taxes and new chemical regulations. Chief executive Juergen Hambrecht told Berliner Zeitung: "The likelihood that the number of workers will further decline, is relatively high. We will, however, make the effort to realise this in a socially acceptable way as up to now."

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