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Plastics New Zealand - Trade Organisation

Plastics New Zealand - Trade Organisation

The price of raw materials for the Plastics Industry continues to increase and the industry is unable to hold back price increases to recover higher costs any longer.

Internationally, polymers are priced in US dollars. A combination of higher international prices and a reversal in the appreciation of the NZ dollar against the US dollar has affected importers and manufacturers since December.

The world market for polymers has seen price increases of up to 30% in the last 3 - 4 months. This has largely been due to tight supply as the world's demand for plastic products has continued to grow at a rate that existing supplies have difficulty keeping pace with demand. Any significant increases in world production capacity will not come on stream for another 18 months with major increases in capacity at least 3 years away. Internationally demand and pricing is forecast to remain strong.

NZ manufacturers will need to increase prices significantly just to recover the extra costs of the base polymer raw materials. Further increases may also be required if the NZ dollar weakens further against the US dollar. Other "imported" cost factors such as freight rate increases and Biosecurity checks must also be recovered.

It should be noted that local cost increases such as wages, transportation, insurance & ACC premiums, plus compliance cost have already been absorbed by the Industry, and also need to be recovered to ensure the viability of this sector of our manufacturing base.

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