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May 27, 2013 02:00 AM

Report: World could face shortage of biaxially oriented PET film

PLASTICS && RUBBER WEEKLY
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    Researchers have questioned whether increases in film extrusion capacity will be enough to guarantee supplies of biaxially oriented PET (BOPET) thin films to Western markets.

    A new report by PCI Films Consulting found that after shortages of BOPET thin films in 2010 the industry had worked hard to ensure that supplies did not dry up.

    However the report questioned the success of such a strategy, arguing that "significant" increases in capacity in recent years – allowing for production of around 2 million metric tons in the next three years – would not do the job.

    Over the next five years the global market is expected to use another 900,000 metric tons of thin film and suppliers are gearing up for this with investments in an additional 1.3 million tonnes of new capacity, PCI acknowledged.

    But PCI's Simon King, who wrote the report, believes such headline numbers are misleading for two reasons. "First, nameplate capacities are never realized and a more realistic level of production from this new capacity could be as low as 75 percent of nameplate.

    "Secondly, most of this new capacity is being installed in China and Chinese film producers don't seem to be able to connect with European and North American customer needs. Many do not see them as realistic alternatives at present".

    Westernized regions, such as Europe and North America, continue to be major importers of BOPET thin films since their local industries were not large enough or competitive enough to meet local demand and regional producers appear to be doing little about it, PCI said.

    It reports the running up of new capacity in Turkey and Poland and two new plants in the US, "but these will do little to absorb the current volume of imports into these regions, let alone meet future demand.

    "While the current investment climate is weak, buyers are encouraged to gain a broader understanding of potential suppliers and their capabilities in commodity BOPET thin films outside of traditional supplier networks to ensure continuity of supplies in the coming years."

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