Polystyrene, a standard polymer in BASF's range of styrenic plastics, is used extensively in packaging materials. While polystyrene is too vapour-permeable to be used in blister packaging, its insulating properties means that it is widely used as a packing material for cartons used to freight pharmaceutical products.

The company is blaming the increases on extraordinarily high raw material costs. The main raw materials for polystyrene are benzene and ethylene, which are used in the production of styrene, the pre-cursor of polystyrene.

"We buy benzene in order make styrene," said BASF spokesperson Dr Sabine Phillip. Benzene prices are affected by oil prices, she added, and at present oil prices are running extremely high.

Shadowing these, the price of benzene has now reached historically high levels. Prices have been rising steadily since the start of the year, and are now double what they were six months ago.

"Anyone who uses polystyrene for packaging purposes will almost certainly be putting the extra costs through their value chain," said Phillip.

"It is difficult to predict if prices of benzene have peaked," said Phillip. "I don't think we'll see an immediate improvement, but in the medium-term, we'll be looking to see if things get better."

Meanwhile, BASF has also reported that more job losses are likely in Germany as cost-cutting measures fail to offset the negative effects of taxes and new chemical regulations.

Chief executive Juergen Hambrecht told the Berliner Zeitung: "The likelihood that the number of workers will further decline, is relatively high. We will, however, make the effort to realise this in a socially acceptable way as up to now."