markets | European polymer demand
Million tonnes 40.4
41 40 39 38 37 36 35 34 33 32
38.7 37.8 37.4 37.0 36.5 35.4 36.5 36.5 36.8 38.0
substitution and new product development. PET bottles, for example, can replace glass for the packaging of alcoholic beverages, barrier sheet and multilayer rigid and fl exible constructions may replace glass and tin cans, plastic one-piece closures are replacing two- piece closures and metal tops.
Some of the engineering resins, most notably polyamide and PBT, managed to maintain market volumes despite the downturn in car manufacturing, driven largely by developments in electrical and lighting applications.
Moving forward 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017
Total European polymer demand (actual and estimated), 2007-2017 Source: AMI
car production, the outlook for plastics processing there is better than it has been for a decade. Central Europe also continues to show positive
Packaging accounts for almost half of European polymer demand but still offers opportunities for further growth by glass and metal replacement
growth, even if some of the smaller countries remain vulnerable to external shocks. Poland is the only country in Europe which has not technically gone into recession since 2007. While overall Polish polymer demand growth has weakened, the country still manages to show some positive trends in areas such as appliance manufacturing and consumer packaging markets. Automotive production in Poland in 2012 contracted substantially. However, automotive produc- tion has helped to sustain demand in other Central and East European countries, particularly Slovakia and to a lesser extent, Hungary. On an application level, packaging demand for
polymers remained steady through 2012. The packaging sector accounted for nearly half of all polymer pro- cessed in Europe but trends in downgauging, light- weighting and increased use of recyclate impacted on overall demand for virgin resins. However, opportuni- ties still exist in the packaging industry in material
Looking ahead, there is widespread uncertainty over just how quickly markets will recover from the downturn and to what extent polymer consumption will move back towards its pre-2007 levels.
For 2013, demand is expected to be largely un- changed on the previous year. The fi rst half of the year continued the weak fundamentals from 2012, but this is expected to be offset by improving demand in the second half as confi dence has been slowly recovering in consumer markets. However, demand, pricing and raw material availability are all expected to remain volatile, so margins will continue to be challenging for raw material suppliers and buyers alike.
Nonetheless, AMI takes the view that polymer demand has bottomed-out and in the years to 2017 there will be modest annual growth. The recovery will, however, be slow as less stock is being held through the supply chain. Processors fearful of any sharp downturn in prices are much more cautious these days about what stocks they hold and also about who they sell to. They are also focusing effort on controlling costs, preserving cash and optimising operations.
One reason that polymer demand has not bounced
back as strongly as might have been expected is that the downturn has focused companies’ activities on maintaining margins rather than going for volume. Average order sizes have tended to shrink (which usually brings a premium). And processors buy to order and hold lower stocks despite, at times, erratic and tight availability of raw materials. While it is hard to see overall European polymer demand advancing at anything much above GDP rates going forward, expectations of where growth will occur have changed over the past two years. Germany and northern European (Benelux and the Nordic countries) recovered more strongly and are considered more economically sound, so will be the drivers for growth in Western Europe. Poland and other Central European countries are also still expected to show good growth, driven by ongoing investments in car production and
24 INJECTION WORLD | November/December 2013
www.injectionworld.com
PHOTO: LANXESS
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