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Materials market monitoring 'threatens packaging film pricing'.

An apparent discrepancy in the means by which packaging film producers liaise on prices with their customers is threatening to destabilise film prices, according to the Packaging and Films Association. PAFA uses weekly indices published by Platts and ICIS to monitor material price movements and its members can also use them to determine price movements to end customers.

Now PAFA says that one of the indices--it doesn't say which--has "inexplicably diverged to the degree that it no longer reflects reality in the market place." According to chief executive Barry Turner: "After an extremely difficult period of increasing prices paid by converters for their raw material, they face a further challenge from an unexplained divergence in the UK polymer price indices which are crucial to maintaining a real-time, realistic view of the cost of polymers and therefore end prices. This divergence is so significant that it may not only seriously affect market price stability, it could even result in price indices being abandoned as a reliable polymer pricing mechanism".

He added that, following a sustained period where film margins have been squeezed, "To be faced with an index that is signalling faster downward movements than are actually occurring is a very serious problem. If sustained, it could result in converters moving away from pegging their prices to an index that has inexplicably moved out of line, as it would impact on the viability of the UK plastic films and film products industry."
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Title Annotation:packaging materials
Comment:Materials market monitoring 'threatens packaging film pricing'.(packaging materials)
Publication:British Plastics & Rubber
Geographic Code:4EUUK
Date:Oct 1, 2010
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