TPT September 2009

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Industry News
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
Email:
Website:
Polymer demand slumps for 2008
 The European plastics industry has taken a battering in 2008