While paper manufacturers continue to announce price rises, soaring oil prices and logistical disruptions in the Middle East are beginning to take their toll on the formulation chemicals industry. The Fédération des industries des peintures, encres, couleurs, colles et adhésifs (Fipec) warns of the possible consequences for the French industry.
The price of Brent crude, the international benchmark for oil, has been hovering around $99 a barrel, reaching $103 on March 9. According to Fipec, this rise has led to "a rapid increase the cost of petrochemical solvents, binders and additives, as well as energy costs linked to manufacturing processes.
Manufacturers also have to contend with rising energy costs. Manufacturing processes require high levels of gas and electricity consumption, making production even more expensive.
Supply chains already disrupted
Geopolitical tensions also affect the transport of raw materials, stresses the national federation, which brings together five associations including the Association des fabricants d'encres d'impressionie (AFEI). Insurance premiums linked to war risks are rising for ships operating in the zone.
According to Fipec, several sea freight operators are already modifying their routes. Some flows now bypass the Gulf and Red Sea via the Cape of Good Hope, adding around ten days to transport times.
Air transport is also experiencing disruption. The closure of certain airspaces and hubs such as Doha is altering logistics flows and increasing costs.
Risks for the industrial sector
If tensions continue, the industry could face a structural rise in costs and more uncertain availability of several chemical inputs.
The federation points out that this situation could have a negative impact on the competitiveness of SMEs and ETIs in the sector, and affect several downstream markets, notably construction, automotive and manufacturing.
Fipec supports the monitoring work undertaken by France Industrie and Medef with public authorities. The organization calls for closer monitoring of energy and logistics risks, and for Europe-wide coordination of critical supplies and strategic stock management.
The federation also points to the need to accelerate the development of biosourced and local raw materials to reduce dependence on petrochemical resources.
