TPT September 2009

I ndustry N ews

NOT since the early 1980s has the plastics industry in Europe experienced such difficult market conditions as seen in 2008, according to a new report by Applied Market Information (AMI). Demand for thermoplastics slumped by 8% compared with 2007, according to the latest edition of AMI’s European plastics industry report. The downturn followed two years of better than average growth with demand reaching a peak of just over 41 million tons in 2007 but this masked underlying structural weaknesses of overcapacity, under-investment and poor competitive positioning for many plastics processors. AMI expects the recession to drive significant restructuring within plastics processing markets with growing investment from outside Europe and a continuing drift of manufacturing to Eastern Europe. Market demand began to slow during the first half of 2008 as concerns began to surface about the liquidity of the banks. Record high oil prices also put the squeeze on polymer converters. Even so, few were prepared for the precipitous slide that occurred from August 2008 as the uncertainty created by the global economic environment translated into a rapid decline in consumer confidence and had the effect of wiping out five years of growth for polymer in just four months. In the last quarter demand declined on average by 20-25% for most resins. In analysing the reasons for this turn of events, AMI points to massive converter destocking during the final quarter of the year as the main culprit. Weakening consumer demand through the second half of the year also impacted on converter operations resulting in cutbacks. The crash in demand affected all polymers, applications and markets to a greater or lesser extent. Anything feeding into building, automotive or discretionary consumer products was badly hit. However, there is expected to be some significant up turns for thermoplastics in the period 2010-2013. Hygiene and medical markets will remain strong and automotive applications should recover once car production picks up again, but this is likely to be of more benefit for plants to the East with further rationalisation of capacity expected to be seen in Western Europe. Building markets will pick up driven by government-backed stimulus programmes and ongoing demands for improved energy efficiency. Applied Market Information – UK Fax : +44 117 989 2128 Polymer demand slumps for 2008

Email : info@amiplastics.com Website : www.amiplastics.com

 The European plastics industry has taken a battering in 2008

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S eptember 2009

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