Uncertain economic conditions and rising oil prices despite plentiful supplies will see prices of plastics products increase, according to the British Plastics Federation (BPF).
The UK plastics trade association argued that despite there being “no shortage of oil,” speculation and the cold weather have driven oil prices to a “record high”.
On 12 January last year Brent Crude was $51 a barrel. But on 2 January this year on the Nymex Exchange in New York the oil price hit $100 a barrel for the first time and Brent Crude reached a record high of $98 a barrel in London.
Director general of the BPF, Peter Davis, said: “Inevitably this increases the cost of producing plastic products, which will have to be passed on to customers. It is essential plastic processors recover these increases to maintain profitability, investment and innovation."
He also urged the UK government to abandon plans to raise fuel tax by 2p per litre in April as it argued that the move would harm competitiveness of UK industry.
Davis, who made his comments in his New Year message, also expressed concern over the UK’s 2007 account deficit, which is likely to hit a record £60bn. He said this would account for 5.7% of GDP and represents the country’s worst deficit since the 1980’s,
He added: "This disastrous balance of payments deficit is a clear signal to Government that it must reverse its cuts in support for exporting and put trade development at the top of its priority list."
However, it’s not all doom and gloom. Davis said: "The Bank of England is keeping inflation under control but they must cut interest rates again this month to help the manufacturing industry avoid problems from the credit crunch. Although a slowdown seems likely, a recession should be avoidable."
Related Catagory: Plastic Material