How rising Ethylene Vinyl Alcohol Copolymer prices putting packaging sector under pressure
- 31-Mar-2022 3:52 PM
- Journalist: Timothy Greene
The Global barrier film market has been bullish with growing working populations, changing lifestyles, reliance on processed food, all of which are driving up the demand for the packaging sector. The prices of Ethyl Vinyl Alcohol have soared globally this month due to supply scarcity in combination with solid feedstock and current logistical challenges associated with war and the Covid outbreak in China. EVOH's escalating prices impacted the input raw material costs for various downstream industries, particularly food and beverage packaging. Ethylene Vinyl Alcohol Copolymer is used to prevent oxygen and water vapor penetration, reduce wastage, and safeguard food from deterioration and contamination.
On the other hand, feedstock Ethylene and Vinyl Acetate Monomers are also under cost pressure from sky-high upstream Crude Oil price breaches and increased energy prices in the global market. The key Asian players, Nippon Gohsei and Mitsubishi Chemical Holdings have revised their product prices. If the supply scarcity persists, feedstock Ethylene-Vinyl Acetate monomer prices may rise, influencing Ethyl Vinyl Alcohol prices in the Asia-Pacific region.
Upstream Crude oil prices have risen sharply since the beginning of the Russia-Ukraine conflict, prompting the United States and its allies to impose harsh sanctions on Russia, the world's second-largest petroleum supplier. Brent crude hit nearly USD 140 a barrel earlier this month, the highest level since the 2008 financial crisis, and has remained above USD 110 since Russia invaded Ukraine on February 24. This geopolitical situation has had an impulsively opposing force on the downstream food & beverage packaging, pharmaceutical packaging, automotive, and electronics industries in most Asian countries.
As per ChemAnalyst, "The Ethylene Vinyl Alcohol Copolymer market is predicted to increase in the coming weeks due to rising demand for barrier films to safeguard electrical parts among electronics manufacturing businesses in China, India, Japan, and South Korea. With increasing environmental concerns, the importance for eco-friendly organic packaging materials and the uncertainties associated with the COVID-19 pandemic can lead to the further price rise of Ethyl Vinyl Alcohol across the global market."