European market growth forecast for 2014

EUROPEAN PLASTICS NEWS

Published: November 18, 2013 10:23 am ET
Updated: November 18, 2013 10:24 am ET

Related to this story

Topics Materials, Europe, Materials Suppliers

Polymer demand growth in Europe for 2013 is expected to be static compared with 2012, according to Applied Market Information, which has just published its 2013 European Plastics Industry Report.

AMI calculates that the market for thermoplastics in Europe is currently 36.5 million tonnes, a volume that is still nearly 4 million tonnes less than the peak it hit in 2007.

Although during 2010 and into 2011 the industry made a modest recovery from the devastating effects of the global downturn of 2008 and 2009, by the last quarter of 2011 the recovery was beginning to run out of steam in the face of the looming eurozone crisis. While the drop in demand over 2012 and 2013 has been far less severe than in 2008-2009 - polymer producers and processors alike have been more savvy about managing their inventories and have not got caught out as they did in 2008 - the decline in government spending, manufacturing and consumer confidence still resulted in an overall contraction of polymer demand of just over 1 percent in 2012.

However, whilst the market has undoubtedly been tough over the past five years, most companies have come through the downturn and continue to thrive and grow through the use of innovative technologies, material developments and new application gains. The discipline of the downturn has made companies cut costs, preserve cash and be judicious in their investments. Those that are surviving are increasingly thriving. Furthermore AMI views the industry now at the bottom of the cycle with demand expected to pick up again from 2014.

Germany, the engine of the European chemicals and plastic industry, has been the strongest of the West European markets. Although polymer consumption was down marginally in 2012 current market demand of around 8.2 million tonnes is only fractionally off the demand levels of 2007. The market has been sustained by the strength of its small and medium sized processors which have often developed leading roles in niche markets.

Central Europe also continues to show positive 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. Although polymer demand growth has weakened, it is still managing to show some positive trends for appliance manufacturing and consumer packaging, even though automotive production in 2012 contracted substantially. However, automotive production 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, accounting as it does for nearly half of all polymer processed in Europe but trends in downgauging, lightweighting and increased use of recyclate impacted on the overall demand for virgin resins. However, opportunities still exist in material substitution and new product development, e.g. PET bottles for the packaging of alcoholic beverages replacing glass bottles; barrier sheet and multilayer rigid and flexible constructions replacing glass and tin cans; plastic one piece closures replacing two-piece closures and metal tops.

While markets are expected to return to growth next year, AMI acknowledges that the effects will be patchy and there will continue to be winners and losers across the European plastics industry. The countries of Southern Europe will continue to seeing shrinking demand as their economies structurally readjust, while Germany and northern European markets (Benelux, UK, Nordic markets) are considered to be more economically sound, which should help to drive growth at least in line with GDP.

Central European countries are also still expected to show good growth, driven by ongoing investments in car production and electrical goods manufacturing although the success of their plastics industry will be dependent on growth continuing in the West. However, volume growth will continue to be offset by trends in lightweighting and downgauging meaning that polymer demand growth is unlikely to advance beyond GDP growth rates. As a result it is likely to be 2020 or beyond before the industry see demand back at its 2007 level again.


Comments

European market growth forecast for 2014

EUROPEAN PLASTICS NEWS

Published: November 18, 2013 10:23 am ET
Updated: November 18, 2013 10:24 am ET

Post Your Comments


Back to story


More stories

Image

Formosa to be compensated for Vietnam riot

July 28, 2014 1:44 pm ET

Taiwan's Formosa Plastics Group will receive $2.39 million from the Vietnamese government and insurance companies for damages suffered during the...    More

Image

Ukraine's Group DF may be forced to sell Crimea-based additives plant

July 28, 2014 10:12 am ET

Group DF, the industrial business of Ukrainian tycoon Dmitry Firtash, may be forced to sell off Eastern Europe's biggest producer of titanium oxide,...    More

Image

Austrian mold maker seeking North American manufacturing partner

July 25, 2014 1:49 pm ET

An Austrian mold maker is looking for a manufacturing location in North America.    More

Image

DuPont resins help take Nike golf balls 'Fore!'ward

July 25, 2014 1:07 pm ET

It may be difficult to imagine just how much science, not to mention rubber and plastic components, go into a golf ball. But global giant DuPont Co....    More

Image

Bioplastics maker wins government funding

July 25, 2014 12:13 pm ET

Canadian bioplastics maker Solegear Bioplastics Inc. has won $1.6 million in funding from the government-sponsored Western Innovation Initiative (WINN...    More

Market Reports

Plastics Recyclers Data Report & Directory

This exclusive MS Excel database contains all the companies from Plastics News' ranking of top North American Recyclers and Brokers by reprocessed volume and also includes a directory with materials processes, services offered and company contact information. Data is based on primary research by PN editorial staff.

Learn more

2014 Injection Molding Industry Report

GROWTH, OPPORTUNITY IN SIGHT FOR INJECTION MOLDERS IN 2014

In the wake of the economic turbulence earlier in this decade, molders today find themselves in much better shape. Molders are gaining a competitive advantage by investing in people, equipment and seeking inroads into new markets on a global scale.

Growth in the injection molding industry is going to be driven by low financing costs and a continued move to reshore some business.

Learn more

Shale Gas Market - Analysis of North American Region

This report highlights the impact of shale-based natural gas on the North American plastics market and features an in-depth analysis of production trends in the United States during 2013 and a forecast for 2014 and beyond.

Learn more

Upcoming Plastics News Events

September 10, 2014 - September 12, 2014Plastics Caps & Closures 2014

January 14, 2015 - January 14, 2015Plastics in Automotive

February 4, 2015 - February 6, 2015Plastics News Executive Forum 2015

More Events