Higher raw material costs in the US and to a lesser extent in Europe has put pressure on the operating profits of most plastic packing companies and has led to price increases for their customers, according to the latest credit report by Standards & Poor, who said: "Overall, 2004 operating performance for rated packaging companies was mixed with higher year-over-year volume growth offset in many instances by higher raw-material prices and increased energy costs. Most plastic packaging companies have reported lower earnings for the first quarter of 2005 as compared with the corresponding period 2004, owing to significantly elevated plastic resin costs, sluggish volume trends and downguaging by customers to lower priced products." The prices of certain plastic resins declined in April and demand from China has slowed.
