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 to pull out of the Iran nuclear deal? Politicians worried about Iran’s regional wars, human right activists concerned about terrorism, citizen safety and economists held their breath watching the oil price chart spike up.
For industry specialist, the fluctuated movement of crude prices is nature to them, a nature that is normal and still terrifying. A rise or slump in oil price can be a consequence of several international events and can lead to price change in myriad oil-related sector. As in March, 2019, the oil price flow in on the increase, and it can be accounted for three indicator:
Decrease crude supply from the Middle East.
Global economic growth leading to more consumption of electricity and transportation, hence the rising demand for oil.
Tension between major oil-producing countries. If there is conflict between regions as occur quite frequently now in the Middle East, crude inventories will fluctuate.
Oil price and plastic cost
The relationship between oil price and plastic cost is simple: most polymers are refined from crude. In an oil refinery, manufacturer distill heavy crude oil into groups of lighter fractions. Each of these fraction is a fusion of hydrocarbon chains. One of them, naphtha, is the vital compound for plastic production.
As a result, raw plastic price fluctuates along the price flow of oil price. An increase on the price of crude oil will lead to the rise of plastic production cost and vice versa.
Relationship between oil price and plastic price.
The key role of filler in the market
As oil price rockets, CaC03 filler masterbatch has become the rule for survivor. 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 cap, PP flip-top bottle, PVC pipe, HDPE for 3D printing, contain CaCO3 filler in their material.
Climbing resin prices, heavy tariff 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 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 not limited to the exclusive options such as HD filler masterbatch, HIPS filler masterbatch, PE filler masterbatch, PP filler master batch, transparent filler master batch. They are specially manufactured to optimize the usage and reduce the production cost of injection molded and blow molded products. EuP has been a reputable partners of plastic producers from 70 countries across the world.
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