A Sunday Times report suggesting current big increases in steel demand from China could add 4p to the price of a can of baked beans, simultaneously signalling the beginning of the end for cans, has been slammed by the Metal Packaging Manufacturers' Association (MPMA) and a leading metal industry analyst.
The story, in the newspaper’s January 16 edition, said burgeoning Chinese demand had seen steel prices “almost double” in the last year, quoting a rise in the cost of hot rolled-coil, the principal raw material for steel tinplate cans, from £221 to around £370 per tonne. Consequently, it said, retailers and manufacturers “had been forced to add as much as 4p a can to the price of a can of beans”, with retailers warning further rises “are likely”. The last paragraph, dubbed “pure scaremongering” by MPMA director Tony Woods, added: “The soaring price of the steel could mark the end of the tin can.”
Woods acknowledges global steel price rises are “unwelcome” for packaging manufacturers, but says prices of packaging steel specifically have actually only risen by 20% in recent months. He says: “To suggest a 20% increase will have can producers throwing in the towel is ludicrous. Nor does the Sunday Times piece acknowledge that the price of alternative materials, like plastics, has in some cases risen significantly more dramatically than steel and tinplate.”
While data from world metal and steel news service Metal Bulletin on overall hot rolled coil price rises correlates with the Sunday Times figures, Woods takes issue with the article’s “whole tone and conclusions”. He adds: “The recent steel price rises could add perhaps Ip to a can costing, say, 43p in a supermarket.”
A leading metal industry analyst also dismissed the report, adding: “The total cost of a steel can’s raw materials – tinplate, lacquer and compounds – is typically only around 2p/unit, of which 1p is accounted for by steel. Thus even if steel prices did double, the effect would be negligible.”
Last October Tetra Pak claimed a switch by Sainsbury’s of its own brand chopped tomatoes from cans to Tetra Recart retortable cartons marked a “watershed”. However the analyst is unconvinced. “It is understandable packaging producers using alternative materials that challenge the sector norm will tout their benefits, but to suggest cans will disappear is laughable.”