Global polymer trends | markets feature

AMI Consulting has just published a new report which fully

documents global plastics consumption by polymer type, region and
process. Senior project manager Carole Kluth reviews some of the
key trends for the industry and its future outlook

Global success story:

analysing polymer demand trends

The global polymer industry consumes raw materials

tinue to be significant as heritage materials retain a

The plastics

worth more than US$500 billion per year and trans-

strong position in many markets and there is great

industry has

forms them into plastics products valued at more than

potential for polymers to continue to replace them.

become a

As with all industries, plastics face a number of

major part of

US$1 trillion. It is a major part of the world economy

the world

and an industry which contributes to every country and

significant challenges and opportunities in the coming

community on the planet. It is generally calculated that

decades. It is clear that plastics will be called on to play

economy,

the average consumer uses or touches over 50 items

a vital role in this changing world. The opportunities are

contributing to

every day which depend on plastics for their functional-

many and the challenges mostly derive from the

every country

ity and performance.

successful development which has already been

on the planet

The success of plastics has generally been achieved

achieved. The challenges which confront the industry

are clearest in the area of packaging, where around half

design flexibility it offers to brand owners. These are

of all polymers are used. This success means that

the characteristics which have led to the replacement of

polymers are very visible and therefore increasingly the

metals, glass, paper and other traditional materials in

focus of unjustified and ill-informed attacks from

many applications. Indeed, the future opportunities con-

politicians and vested interest groups.

www.compoundingworld.com

because of the materials light weight, strength and the

November 2014 | COMPOUNDING WORLD

19

markets feature | Global polymer trends

Global polymer
demand growth
1983-2018

Source: AMI
Consulting, 2014

What the industry must hope is that the rational

decisions which recognized plastics superior perfor-

exists in nearly every country in the world.

The last 30 years have also seen a significant change

mance in relation to traditional materials will continue

in the structure and direction of the world industry. In

to be accepted. However, real issues such as food waste

1983, approximately 74% of world demand occurred in

and energy conservation are impossible to solve without

the developed countries of North America, Western

plastics materials. In a world where 1.3 billion tonnes of

Europe and Japan. By 2013 their share of world demand

food are wasted every year and US$6.5 billion-worth of

had decreased to 32%. This is despite the fact that

goods are damaged in transit because of insufficient

demand has continued to grow quite strongly in these

protection, the contribution that plastics products can

countries over much of this time. However, slower

make to these challenges has never been clearer.

growth for much of the 21st century, together with much

faster growth in developing regions, particularly China

Global success story

and East Asia, means that China is now the largest

The polymer industry has been a story of success over

market for polymers in the world with a share of 29%,

the past 30 years. The period since 1983 has seen world

compared with 6% in 1983. Indeed, it became the worlds

demand grow from just over 45 million tonnes to an

largest market for polymers as far back as 2002.

expected market demand of over 250 million tonnes for

2014. Today, a thriving plastics processing industry

Because of its sheer size now, China will remain the

key market in terms of determining the overall growth
of the global polymer industry going forward. Through
careful management of its economy, the Chinese
government is now steering business towards serving
its local consumer markets rather than relying on being
the workshop of the world, which has driven the
development of plastics processing in the region for the
past 30 years.
Meanwhile, other parts of the world are expected to
accelerate going forward. Africa offers enormous
potential thanks to its vast population, fast economic
growth and considerable natural resources. In addition,
the proximity of North Africa to the markets of Europe
offers potential for off-shoring.
The Middle East, despite its political turmoils, offers
high growth potential thanks to its pivotal role in the
global production and export of commodity polymers.

Global polymer demand by region 2013

20

COMPOUNDING WORLD | November 2014

expected to drive further investment in major, exportoriented plastics processing operations.

Source: AMI Consulting, 2014

The investment in large-scale petrochemical plants is

www.compoundingworld.com

markets feature | Global polymer trends

Although South America has long been regarded as

a region of considerable potential for strong growth,
particularly Brazil, growth has in reality been erratic
with the industry held back by a number of factors.
These include: weak and unstable governments; high
debt burdens; a dependency on globally traded
commodities (making the region vulnerable to external
economic shocks); burdensome import tariffs; high
energy costs; and infrastructure bottlenecks. These
factors will continue to limit its potential.
The Asia-Pacific region slightly underperforms in
relation to the global average because of the effects of
the mature and slow growing Japanese market. Without
Japan, the regions growth is at least one percentage
End use applications for polymers 2013
Source: AMI Consulting, 2014

point higher. Huge potential still exists within the

Indonesia, Vietnamese, Korean and Malaysian markets.

Packaging leads the way

The strongest growth is expected to occur in the

AMIs analysis looks in detail at where and how

Indian sub-continent, a region which has a population

polymers are used around the world. Although they are

greater than that of China but with a polymer demand

used in a wide variety of different applications, packag-

that is currently one-fifth of the size. The market is

ing has come to dominate the end-use markets for

being driven by policy relaxations, allowing greater

polymer. This is true in all geographic areas of the

foreign direct investment and closer integration with the

world. Overall, packaging accounts for around half of all

global economy to drive investment in petrochemicals,

polymers processed in volume terms, split fairly evenly

polymer production and downstream plastics process-

between flexible and rigid products.

ing. However, the region also faces many challenges,

Of the remaining applications, the building and

particularly with regard to its infrastructure, technical

construction sector makes up a further 20% of demand.

capabilities and global competitiveness. Strong

This means that despite the attention given to automo-

economic growth is needed to drive rising living

tive, medical and electrical applications, they remain a

standards and increasing consumption of consumer

relatively small part of the overall industry in volume

goods from packaged foods to automobiles. Investment

terms, although these markets often represent much

in infrastructure and agriculture will also be important

higher added value to the polymer used.

in driving the plastics industry in the region.

Europe is expected to be the region showing the

The relative importance of each market varies with

polymer. Thus for polyethylene and PET, for example,

slowest growth overall. Market demand there has been

the packaging industry is far more significant account-

relatively static at around 44-45 million tonnes for the

ing for over 70% of use than it is for many of the

past three or four years, largely because of the effects

engineering resins which find their main applications in

of the Eurozone crisis, which has inhibited recovery

automotive and electrical products.

from the impact of the global financial crisis in

2008-2009. However, the EU is also at the forefront of

Fragmented industry structure

environmental initiatives to reduce, recycle and reuse

In general terms, plastics processing in most parts of

polymers, which has impacted on volume growth for

the world is characterised by a fragmented industry

polymers. Polymer processing in the region, especially

structure which involves a large number of small- to

within the EU, remains under pressure from rising

medium-sized companies. AMI has calculated that

costs, particularly energy costs.

there are probably over 230,000 plastics processing

After many years of relatively slow growth, the

market outlook for the North American region is now

22

operations in the world.

Traditionally the industry has been quite entrepre-

far more positive thanks to the increasing availability of

neurial with new businesses being set up to replace any

globally competitive gas feedstocks, which is driving

lost through acquisition or liquidation. However, in

investment in new petrochemical plants. This will help

recent years the process of structural change has been

to reduce the cost of polymers, particularly polyethyl-

more one of rationalisation, particularly in developed

ene, and re-energise the plastics processing industry.

markets, driven by the ever more competitive pressures

COMPOUNDING WORLD | November 2014

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markets feature | Global polymer trends

within a maturing industry. This has been compounded

greater capital investment and usually involves larger

by the effects of the global recession. Furthermore, in

capacity machines.

many countries where the industry is still relatively

small, the structure will be one in which there will be a

Future outlook

handful of larger groups, often operating multiple

In the 1980s and 1990s, the process of substitution of

processes. These will account for a significant propor-

traditional materials and the forging of new applications

tion of the polymer demand in that country, alongside a

ensured that polymer demand growth could outstrip

large number of much smaller players. In many parts of

economic growth. Since the turn of the century, polymer

the world, plastics processing is also characterised by

demand has increasingly moved in line with GDP trends.

smaller, unorganised companies which operate just one

However, the scope for growth in developing parts of the

or two machines in an intermittent fashion and

world will ensure that the global polymer industry can

purchase very small amounts of polymer.

still look forward to annual increases in demand of

This kind of structure particularly applies to

around 5%/year, which will result in a market in excess

the injection moulding industry. All regions of the

of 300 million tonnes by 2018.

world are characterised by a large number of

injection moulders, reflecting the wide availabil-

More information

ity and relatively low cost of moulding equip-

Global Polymer Demand is an AMI consulting data

ment. AMI estimates that there are in the region

report. It provides detailed statistical data on the demand

of 130,000 injection moulding companies. The

and end-use for all major thermoplastic materials

process is popular as it requires a relatively low

worldwide. For further information please contact Carole

investment to produce plastics goods for a local

Kluth at AMI Consulting (cmk@amiplastics.com, +44 117

market. In broad terms, extrusion equipment,

311 8120), or visit http://bit.ly/AMIglobal.

be it for film, pipe or fibre, tends to require

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