Plastic Prices to Pressure Soda Prices – WSJ.com

Plastics Jan 29, 2011 No Comments

Higher resin costs are pushing up the price of polyethylene terephthalate, or PET, the plastic used in a variety of consumer products such as soda bottles and clothing. Bottle-grade PET is up more than 21% from a year ago and more than 24% since late September, according to ICIS, which tracks petrochemicals data.

One reason for the rise in PET plastic prices has less to do with soda and more with textiles. Cotton prices are up more than 145% over the past year, hitting 140-year highs recently on supply concerns. To combat the higher costs, clothing manufacturers are buying more polyester to blend into clothing and other textiles, said Chase Willett, PET consultant at Chemical Markets Associates Inc. That affects the price of PET plastic resin because both are from the same raw materials.

“It’s a sizable enough incremental volume shift that it creates problems in the polyester supply chain,” Mr. Willett said.

He estimates that amount of resin used in a half-liter plastic bottle could cost 4.22 cents next month, an increase of 47% from lows last August. Prices could continue higher through the summer until next year’s cotton crop comes in. “We’re in for a long ride this summer,” Willett said.

via Plastic Prices to Pressure Soda Prices – WSJ.com.

Rod Sherkin

Rod is a former senior executive, responsible for Purchasing, for both Pillsbury and Ball Packaging back in the 80’s and 90’s. Since then, he has continued to work in the Purchasing field as both a consultant and founder of the website Propurchaser.com.