It's not a new story. Fluctuations and disruptions in the supply and demand for various packaging materials, inks and coatings are on the minds of CMM Intl. 2003 converter attendees and exhibitors alike. A potential war with Iraq is just one of the scenarios that CMM visitors will be weighing for its possible impact on their own raw-materials prices. We polled a prominent material supplier who will be at the show, as well as our own Economic Outlook columnist Daryl Delano, to get a handle on the near-term future for plastic films, inks and coatings.

"Areas related to high-performance laminates are bound to garner a great deal of attention. Most packaging converters will be interested in this segment, which has had a high level of growth in the last several years and is forecast to continue to outperform other segments of the packaging market," says Michael Impastato, vice president of market development for Flint Ink Corp., Ann Arbor, MI (Booth #6448). "Materials related to high-performance laminates will be 1) inks with broad applications, high-bond and low-GC values; 2) films with superior machine properties, barrier, and clarity; 3) adhesives with high bond strength, broader operating windows, and high clarity; and 4) solventless adhesive laminators."

What is the lure of innovative, high-performance materials and processes, at a time when some converters are struggling just to keep the doors open? For some, it's innovate or close up shop. "The end-use package buyers are definitely driving innovation in the industry. They are the driver, but not necessarily the actual innovator," says Impastato. "The converters are aware that the consumer products companies are hungry for innovation. Converters see innovation as the best way to improve their market shares and relationships with their customers. Therefore, they are continuously pushing their supplier base to bring innovative ideas to them that can be incorporated into the package to generate new features and benefits."

Although it is impossible at presstime for anyone to predict whether or not the U.S. will be at war with Iraq by CMM show time in April, suppliers of petroleum based products are already trying to calculate the impact of a spike in oil prices on raw materials.

"Between the middle two quarters of last year, average prices rose most sharply for the plastics packaging product categories of HDPE, film grade (+16.5 percent), LDPE, liner grade (+10.7 percent), and polystyrene, general purpose (+9.2 percent)," says Daryl Delano, contributing economic editor for Converting. "Over-the-quarter increases for the other four plastics product groups we follow were of a magnitude of between 2 percent and 7 percent, with the smallest increase being registered by PET, bottle-grade category.

"But, compared to the same time during 2001, some plastics packaging product materials prices were still lower during the fall of last year," he says. "Third-quarter 2002 average prices for general=purpose PVC (-4.3 percent), bottle-grade PET (-3.5 percent), and general-purpose LLDPE (-1.5 percent) materials were all still a bit lower than during the same quarter a year earlier, despite the price increases recorded during the spring and summer of last year. The sharpest over-the-year increase for this period of time was recorded by the film-grade HDPE (+19.4 percent) product group.

"Plastics price-trend levels and trends during the year ahead will-as always-be critically dependent upon the price of oil," he continues. "And oil price movements will, of course, undoubtedly reflect the course of our presumptive military action against Iraq.

"However, through last year's third quarter, plastics prices had already moved well off their lows of late 2001 and early 2002. So, compared to the prevailing levels of a year earlier, average prices from a 'year-ago' perspective will look much higher during the next few quarters, regardless of the exact scope and timing of hostilities in the Middle East," Delano concludes.

Plastics aren't the only material whose prices are being carefully watched by converters and suppliers. "White coatings and white ink are also under pressure due to the increasing cost of titanium dioxide pigments," says Impastato. "There have been two 5 percent increases in the price of titanium dioxide in the last four to five months. We are also seeing a significant worldwide price increase in the cost of naphthalene.

"Naphthalene is a key raw material used in the manufacturing of most red and some orange pigments. The magnitude of this price increase is such that it cannot be absorbed by the suppliers along the supply chain. It is likely the impact of the naphthalene price increase will be passed through the supply chain," he says.

Editor's note: For a comprehensive updated list of CMM Intl. 2003 exhibitors, visit the official show Web site at www.cmmshow.com/fs.html and click on "Exhibitor List." At the same site, you can click on "Conference Program" to see an updated grid layout of the technical and management conferences by day and time. CMM conference session topics will continue to be added up until the show.