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

Total picks new management following CEO's death in crash

October 23, 2014 11:03 am ET

Total SA has picked a new management team to oversee the company in the wake of a plane crash in Moscow that killed its chairman and CEO earlier this ...    More

Image

Report: Private equity companies may seek to buy Bayer MaterialScience

October 23, 2014 10:56 am ET

A number of investment groups are reported to be interested buying Bayer AG's MaterialScience operation, valued at around 10 billion euros ($12.6...    More

Image

Plastics lead Dow's quarterly growth

October 23, 2014 10:15 am ET

Dow Chemical Co. has announced its third quarter results for 2014 showing a 5 percent increase on the third quarter of 2013, rising to $14.4 billion...    More

Image

A. Schulman reports growth in sales and profit

October 22, 2014 7:58 pm ET

Executives with materials maker A. Schulman Inc. have to be smiling after seeing full results for the firm's 2014 fiscal year.    More

Image

PolyOne takes on LED lighting

October 22, 2014 4:23 pm ET

PolyOne Corp. is making inroads into LED lighting applications with its Therma-Tech-brand material technology.    More

Market Reports

Plastics Recycling Trends in North America

This report is a review and analysis of the North American Plastics Recycling Industry, including key trends and statistics based on 2013 performance. We examine market environment factors, regulatory issues, industry challenges, key drivers and emerging trends in post-consumer and post-industrial recycling.

Learn more

Plastics in Mexico - State of the Industry Report

This report analyzes the $20 million dollar plastics industry in Mexico including sales of machinery & equipment, resins and finished products.

Our analysts provide insight on business trends, foreign investment, top end markets and plastics processing activity. The report also provides important data on exports, production, employment and value of plastics products manufactured.

Learn more

Plastics Caps & Closures Market Report

The annual recap of top trends and future outlook for the plastics caps & closures market features interviews with industry thought leaders and Bill Wood’s economic forecast of trends in growing end markets. You will also gain insight on trends in caps design, materials, machinery, molds & tooling and reviews of mergers & acquisitions.

Learn more

Upcoming Plastics News Events

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

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

June 2, 2015 - June 3, 2015Plastics Financial Summit - Chicago 2015

September 16, 2015 - September 18, 2015Plastics Caps & Closures - September 2015

More Events