German plastics packagers doubt validity of many force majeure calls

03 April 2012 17:41  [Source: ICIS news]

LONDON (ICIS)--Germany’s plastics packaging industry trade group doubts the legitimacy of many of the force majeure declarations its member firms receive from raw material suppliers, it said on Tuesday.

Industrievereinigung Kunstoffverpackungen (IK) said that almost two thirds of the plastic packagers it represents are facing raw material shortages, with many receiving force majeure declarations from their upstream suppliers.

IK general manager Ulf Kelterborn said that “there is definitely some doubt about whether all of these force majeure announcements are legally sound.”

“In some cases [the announcements] refer to technical outages where an unexpected outside influence is not visible,” Kelterborn added. He did not cite specific examples.

IK also said that more than 80% of respondents in a recent industry survey it conducted feared additional increases in raw material prices in the second quarter.

Raw material suppliers already announced further drastic prices increases for April “and an end of this upward price spiral is still not in sight,” the group said.

In the first quarter, raw material costs for plastics packaging were up by more than 30% year on year in some cases, it added.

IK has more than 300 member companies that supply most of the German market. The group's members have an annual production of about 4m tonnes and employ 60,000 workers, according to information on its website.

By: Stefan Baumgarten
+1 713 525 2653

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