The economies of the U.S. and Canada posted solid growth in 2014 — even though resin demand in those countries lagged behind.
Most major commodity resins posted full-year sales losses in the U.S. and Canada, even though the economies of both countries grew around 2.5 percent for the year. Among six major commodity resins tracked in the U.S. and Canada by the American Chemistry Council, only low density polyethylene finished 2013 in positive sales territory, eking out an increase of 0.4 percent. Polypropylene — including sales in Mexico — came close to breaking even, but finished down 0.2 percent.
Linear low density PE, high density PE and PVC each saw sales declines for 2014 of between 0.5 percent and 2 percent. Polystyrene — also including Mexican sales — took an even bigger tumble of 3.2 percent.
For PVC and all three grades of PE, domestic sales were up but drops in exports created overall negative results. PP saw the opposite, with higher export sales lifting negative domestic results closer to the break-even level.
ACC does not track sales for PET bottle resin, but market watchers said North American sales of that material also were slightly down in 2014.
These results are in contrast to 2014 gross domestic product (GDP) growth of 2.4 percent in the United States and 2.5 percent in Canada, as those countries continue to recover from the Great Recession of 2007-09.
Resin market veteran Phil Karig said the difference in results likely is the result of economic macro-factors, including the continuing push for increasing recycled resin usage, and for thin-walling or otherwise reducing the amount of resin in various products. He added that it's important to remember that demand for resins and the goods produced with them “are very much a part of global markets.”
“The U.S. and Canadian economies don't exist in a vacuum,” said Karig, managing director of the Mathelin Bay Associates LLC consulting firm in St. Louis. “Many other major parts of the world grew slower or were seeing their economies decelerate in 2014 after a lackluster 2013.”
The euro zone grew at a rate of less than 2 percent in 2014, while Japan's economy actually shrunk and China's growth rate slowed down as well, he explained.