Picture Emerging of raw material cost hikes

This month’s edition of Canmaking News contrasts both the old and the new. Old cans proved very attractive to collectors at a Derby auction house, in the UK, showing these early forms of consumer art have cultural value. We also report the new in the challenges that have been tackled by NDH Group in Dubai, in building the first high speed canmaking line in Iraq, a nation trying to get back to normality after the war.

Globally, instead of worries about economic downturns, pressures now seem to be squeezing from the other direction. We have noticed several reports that tinplate prices seem on a serious upswing as steelmakers play catch-up with a reviving economies. And in another area that impacts on our industry a US government move against GM sugar beet could also nudge up sugar prices.

Typically Mr Sanjay Bhatia chairman of Indian Institute of Packaging and president of Metal Container Manufacturer Association of India said that “There has been a rise in steel prices globally. This trend has impacted the Indian steel market. September onwards, steel prices are expected to rise even further. “ He said that as steel prices and tin plate prices are high and are expected to go up, it will lead to increase in the prices of packaged food like in 2008. Some leading packaging companies like Shetron, Kaira, and Hindustan Tin which manufacture tin plate cans are in talks with the Indian steel ministry to address the issue. A representative of Hindustan Tin said that rise in the prices of packaged canned foods will influence customers to think of other options. And the boldly entitled ‘Steel Guru’ says on his blog that key Russian metals manufacturers intend to increase the prices by 10% on September orders.

Already this year Dongbu's tinplate prices have climbed by KRW 250000/t ($213/t) in total to reach KRW 1.466m/t ($1251/t). Every cloud has a silver lining however and workers at the UK’s Llanelli's Trostre tinplate factory are in line to gain a 3.2 per cent pay rise. The steel company is to apply the increase to a large proportion of its workforce as production gets back on track after the recession.

The other commodity impact for the ‘Fillers’ to watch, is sugar. Last month a U.S. District Judge in San Francisco struck down the government’s approval of genetically modified sugar beets, blocking use of a crop that has been used for the last five years. Genetically modified sugar beets account for about half of U.S. sugar production, but could be off limits if new regulatory approval isn’t granted by next spring.

Forward October raw sugar rose above 20 cents a pound for the first time in many months. The US Department of Agriculture moved to relax regulations on sugar import quotas, citing “increased tightness in the US raw sugar market”. The government agency predicts US sugar inventories will next year fall to the lowest in at least 40 years while the International Sugar Organisation expects this year to see the lowest global stocks of the sweetener in 20 years.

And Finally...

Canmaking News will continue to share with the Canmakers the view that current accepted levels of BPA are well below safety limits set by the regulators and it is good to note that in News in Brief in this month's issue our report on Canada Health quotes: "Based on the overall weight of evidence, Health Canada has concluded that the current dietary exposure to BPA through food packaging is not expected to pose a health risk to the general population."

P.S. We now have a facility which which will allow you to click on an image to enlarge the picture. The images with blue surround boxes are those that carry this feature, just click on the image and the picture will be enhanced.

David Siddall
david@canmakingnews.com

Janis Osborn
Publisher
janis@canmakingnews.com