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Packaging costs
Plastic comes from oil, right? And the oil price has been dropping for some time and is now quite low. But is the cost of packaging going down?
I just found a new supplier for a 125mL pot and cap we use for three products. The supplier owns a PIM plant so I was able to get a price a third less than my previous. -
3 Replies
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Hello Belassi,
You are right the oil prices are lower than before however the plastic packaging industry does not follow strictly these price movements. I tell you why. Because of this “low” oil prices many big oil companies decided to slow down the oil extraction and with this maneuver they made insufficiency on the market which caused price increase. Those companies which produce plastic packaging, started to purchase and accumulate all the available raw materials (granulates) because they were afraid of running out from raw materials and in that case they should stop their production lines. This crazy situation generated many differences in raw material prices. That is a recent issue which started in this year around February.
Second also important issue is the production process which also has major effect to the packaging prices. E.g. by the closures, injection mold technology consumes more plastic raw material than e.g extrusion. Some PP packaging depending on or more the raw material prices than for example PE foil where there is almost no weight. The pot that you mentioned can be made of different type of plastic. Heavier, lighter, stronger, weaker PE, PP, PET etc.This is a very interesting topic and I could write pages about it so if somebody has any questions feel free to ask me.
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Interesting information. I always wondered why plastic prices were not affected much by oil price changes.
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Thanks for the very interesting note! I need to get my numbers up so that I can buy a larger quantity at one time.
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