(Published November 2007) Volume demand for thermoplastics in Europe grew by more than 3% in 2006 to reach close to 40m tonnes, its strongest growth this decade, according to the latest analysis from market reseach group Applied Market Information (AMI).
However, not all materials benefited from the improvement. PVC, LDPE and ABS all saw better demand than they have for “some considerable time”, according to AMI, and there was strong demand for linear grades of polyethylene.
However, HDPE demand was weak and general purpose PS declining, and even PP and PET underperformed the market slightly.
“Demand was largely driven by the recovery of the European economy. GDP growth in the Euro-zone area was almost double the 2005 rate and the highest since 2000,” says AMI.
“Germany was the principle engine behind this growth, fuelled by robust export growth and strong investment,” says the company. “Germany is also benefiting from growth in central Europe where local processing cannot always meet the rapidly developing demand for packaging and other goods.”
The report adds that while production of many low cost and labour intensive items have been transferred to central and eastern Europe, more highly skilled goods continue to be sourced from the West – and in particular from Germany.
Overall market demand for thermoplastics in France and the UK remained unchanged and both continue to see some loss of moulding capacity to central and eastern Europe.
Meanwhile, markets in Romania, Bulgaria and the Baltic States continued to boom due to accelerated economic growth driven by strong export performance and investment in automotive, consumer electronics and food packaging. The process of integration into the EU has also been a strong driver.
Polymer demand in central and eastern Europe grew by nearly 9% against the European average of 3%. However, the region still accounts for only 4.6m tonnes of resin, less than 12% of the total market.
The commodity polymer market continued to be driven last year by packaging demand, particularly flexible films for food packaging, injection moulded thin wall PP containers and HDPE closures. Strong demand from the construction industry for window profiles accounted for the good levels of PVC demand – the best in a decade, according to AMI.
The tough market position for PS is accounted for by its continuing unfavourable price compared to PP and PET, prompting substitution in packaging applications. The loss of consumer goods production to Asia is also a factor.
Demand for engineering resins was up by 5% in 2006.