BCF Cost and Availability Issues With Their Coatings Supply Chain - Bedliner News


Monday, March 22, 2021

BCF Cost and Availability Issues With Their Coatings Supply Chain

"The BCF reports that epoxy resin prices have risen sharply since the latter part of 2020, while polyester resin prices are also well up. ... This in turn has resulted in suppliers diverting product to their local markets rather than Europe, further pushing up prices."Jan 26, 2021

According to a news release from the British Coatings Federation (BCF), the lack of available crucial raw materials and product packaging in addition to substantial price boosts are triggering substantial disruption to the coatings and printing ink industries in the UK and across Europe.

According to the BCF, there are four substantial patterns impacting raw material costs:

  • Strong international market demand has actually resulted in scarcities on lots of raw materials
  • The oil price has actually risen by 58% given that November (presently $68 a barrel)
  • The international scarcity of shipping containers has caused a sharp rise in transport expenses from Asia to Europe, thus further restricting materials to Europe

Additional non-tariff expenses associated with the brand-new UK customs arrangements with the EU are adding to the cost of imported basic materials into the UK from Europe.
However, there are also specific reasons for a few of the recent increases. Solvents are one category where costs are increasing quickly. Some examples in BCF's monthly basic material rates survey shows the largest increases in solvent costs in January 2021 versus 12 months ago are acetone (123%) n-butyl acetate (91%), IPA (41%) and n-butanol (54%). Another important issue includes 2 force majeures at major chemical plants producing butyl acetate.

In January, BCF issued a press release reporting sharp price increases for epoxy resins, of as much as 60% in the 3rd quarter of 2020. Similar problems are affecting the marketplace for polyester resins, with factory closures in Singapore and Sweden too a surge at a factory in China contributing to the problems. There are also problems with bisphenol-A stocks being diverted to polycarbonates. Neopentyl glycol and methanol are also both reported to be in short supply.

Concerns have actually also been raised about pigment lacks, such as red and yellow iron oxide. Plastic polymers are likewise in short supply, impacting schedule and costs of product packaging, with 5L paint cans 10% higher than at the same period last year; tin plate has had a similar boost.

Given that basic materials and freight consist of the majority of the general expense to produce paints, coatings and printing inks, this pattern will have a major effect on the operations of BCF member business," said BCF CEO Tom Bowtell. "Where possible, BCF members will look for to alleviate higher costs via internal process optimization steps, alternate sourcing and increased efficiencies.

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