What is the relationship between oil price and plastic cost and which role of filler in this circle?
The unpredictability of oil prices across global
What have people thought when US President Trump announced pulling out of the Iran nuclear deal? Politicians were worried about Iran’s regional wars, human rights activists were concerned about terrorism, and citizen safety and economists held their breath watching the oil price chart spike up. For industry specialists, the fluctuating movement of crude prices is natural to them, a nature that is normal and still terrifying. A rise or slump in oil prices can be a consequence of several international events and can lead to price changes in myriad oil-related sectors.
As of March 2019, the oil price flow is on the increase, and it can be accounted for three indicators: Decrease crude supply from the Middle East. Global economic growth leads to more consumption of electricity and transportation, hence the rising demand for oil. The tension between major oil-producing countries. If there is a conflict between regions as occurs quite frequently now in the Middle East, crude inventories will fluctuate.
Oil price and plastic cost
The relationship between oil price and the plastic cost is simple: most polymers are refined from crude. In an oil refinery, manufacturers distill heavy crude oil into groups of lighter fractions. Each of these fractions is a fusion of hydrocarbon chains. One of them, naphtha, is a vital compound for plastic production. As a result, the raw plastic price fluctuates along the price flow of oil price. An increase in the price of crude oil will lead to a rise in plastic production costs and vice versa.
The key role of filler in the market as oil price rockets
CaC03 filler masterbatch has become the rule for survivors. Filler Masterbatch (or Calcium carbonate CaCO3 Filler Masterbatch) is the combination of calcium carbonate powder and other additives, based on polymer carrier resin. This material is used for filling in plastics to replace a part of expensive virgin polymer. Several types of plastic products today, PE bottle caps, PP flip-top bottles, PVC pipes, and HDPE for 3D printing, contain CaCO3 filler in their material.
Climbing resin prices, heavy tariffs, and strict competition, firms are turning to increase their stock of mineral filler. “More Filler, Less Resin” has become the solution for plastic bag producers or other plastic sectors to prioritize cost value.
About European Plastic Company
Founded in 2007, European Plastic Company (EuP) is the top producer and exporter of CaCO3 filler and master batch in Vietnam. Our filler master batch includes but is not limited to exclusive options such as HD filler masterbatch, HIPS filler masterbatch, PE filler masterbatch, PP filler masterbatch, and transparent filler masterbatch. They are specially manufactured to optimize usage and reduce the production cost of injection-molded and blow-molded products.
EuP has been a reputable partner of plastic producers from 70 countries across the world. Visit our website for more details, or contact us via info@europlas.com.vn